There are “more questions than answers” surrounding Skyworks Solutions , BMO Capital Markets said in its downgrade of the company. Analyst Ambrish Srivastava lowered his rating on the semiconductor company’s shares to market perform from outperform. He also reduced his price target to $100 from $140, implying 4.9% downside from where shares closed on Monday. The downgrade comes after the chipmaker issued weaker-than-expected fiscal third-quarter guidance. The stock dropped more than 9% in the premarket. SWKS 1D mountain SWKS falls “As a rule of thumb, we are loath to changing ratings after the fact. The exception to that is when we either cannot add it all up, if we see a structural issue emerging, or if we see a multiquarter headwind. In this case we see some combination of the above,” Srivastava wrote in a note Tuesday. “Semi stocks typically do not do well with [general margins] headwinds, especially when they are longer in duration,” he added. “It was not so much that Skyworks guided down June revenue vs. expectations, we can live with lower top-line in a choppy market, it is the multi-quarter headwind to [gross margins] that we are uncomfortable with, combined with the very high inventory that the company has on its balance sheet, which will likely impact the latter over several quarters.” The analyst noted that Skyworks has not had general margins below 50% since 2015. He added that while general margins in the second fiscal quarter were in line, outlook for the next two quarters is flat. Furthermore, Skyworks’ recovery in China has been slower than anticipated, leading to underutilization of its factory network, according to Srivastava. “While its competitor Qorvo also attributed to a slower recovery in China, that company sounded a lot more positive about its inventory level being cleaned out with [general margins] headed higher over the next several quarters,” Srivastava said. To be sure, he noted that “Skyworks has executed far better over an extended period of time, particularly on the margin front.” However, “the contrast between the two is quite striking in the current earnings cycle. … Our sense is that the company was expecting a recovery … which is likely not going to materialize.” “All the above bring up the question of whether the company is seeing something structurally different, whether it has to do with issues ranging from more competitive pricing than in the past, share shifts [or] not having the right product mix of the broader diversified business.” Shares are up more than 15% in 2023. However, gains over a 12-month period are more muted, coming in at 3%. —CNBC’s Michael Bloom contributed to this report.