Who's Insulated From The Samsung GS7 Whiff?

Pacific Crest analyst John Vinh reports that initial demand for the new Samsung SSNLF GS7 has been disappointing, despite aggressive buy-one-get-one-free promotions by carriers. According to Vinh, Samsung will not be the only one feeling the pain from the weak launch.

“Despite buy-one-get-one-free promotions, our carrier surveys in North America indicate the GS7 launch weekend was disappointing, which was consistent with carrier store sentiment from our prior survey work,” he explains.

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Vinh notes that inventory levels on a days-of-inventory basis are already higher than they were two weeks after the GS6/GS6 Edge launch. He adds that only a handful of stores surveyed were out of stock, but the majority of stores had significant supply remaining.

While virtually every supplier will be negatively impacted by the launch, Pacific Crest remains bullish on a number of supplier names that are most insulated due to content gains, share gains or capital return programs.

Pacific Crest names the following five suppliers as its top mobile stock picks:

Broadcom Ltd AVGO

Integrated Device Technology Inc IDTI

Maxim Integrated Products Inc. MXIM

QUALCOMM, Inc. QCOM

Skyworks Solutions Inc SWKS

In addition, the firm maintains Overweight ratings on the following stocks:

ARM Holdings plc (ADR) ARMH

Cirrus Logic, Inc. CRUS

NXP Semiconductors NV NXPI

Disclosure: the author holds no position in the stocks mentioned.