What's Going On With Qorvo Shares Monday?

Qorvo, Inc. QRVO stock is trending across social media platforms on Monday. The company is anticipated to release earnings for the 2024 fiscal-year third-quarter on Tuesday after the market closes.

The Details: Ahead of earnings, Piper Sandler analyst Harsh Kumar upgraded the stock from a Neutral rating to a Overweight rating and raised its price target from $85 to $110. The analyst cited Starboard Value’s involvement in the company as the primary reason for the upgrade.

The analyst believes that Starboard has a strong history of success with expense and capital footprint efficiencies and strategic divestitures may be required. Kumar sees this aligning with Qorvo’s situation and estimates potential savings of $150 million to $200 million in operating expenses.

Even though Starboard has not published its plans for Qorvo, the analyst outlined a potential strategy to revitalize the company. The plan includes enhanced focus on core business activities, reducing operating expenses, streamlining the manufacturing network and selling off assets that may be underused or more valuable in the market.

The analyst pointed to Qorvo’s analog business as potentially worth more in the market. This business includes segments in aerospace and defense, infrastructure, industrial and enterprise, automotive and consumer.

Kumar believes Qorvo’s poor stock performance is tied to weak management of the company’s core business, which may improve with Starboard’s involvement. Over the past five years, Qorvo’s stock has fallen 20%.

Analysts estimate earnings per share of $1.20 and revenue of $901.52 million for the third-quarter, per data from Benzinga Pro.

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QRVO Price Action: At the time of writing, Qorvo stock is trading 1.48% lower at $87.62, according to data from Benzinga Pro.

Image: Courtesy of Qorvo