11:29 AM EST, 11/13/2024 (MT Newswires) -- Skyworks Solutions' ( SWKS ) 2025 revenue and gross margins are under pressure amid a weaker outlook for its Broad Markets businesses, Morgan Stanley said in a note Wednesday.

"Gross margins are expected to be roughly flat sequentially for FY2025, which is disappointing as we expected inventory normalization to provide a lift," the firm said, tempering its growth expectations for Broad Markets

to 5% from over 10% previously.

The company's operating expenses are expected to increase "significantly" in fiscal 2025 as it boosts investments in research and development, which is also seen weighing on earnings, Morgan Stanley said.

The Wall Street firm is expecting non-GAAP earnings of $1.56 per share in fiscal Q1, in line with the company's guidance, and projecting EPS of $5.13 on sales of $4 billion for calendar year 2025, down from its previous forecasts of $6.90 on sales of $4.45 billion.

Morgan Stanley cut its price target for Skyworks to $87 from $117, and currently has an equal-weight rating on the stock.

Skyworks shares were down more than 4% in recent trading.

Price: 83.18, Change: -3.86, Percent Change: -4.43