Investing.com -- Barclays downgraded Cirrus Logic (NASDAQ:CRUS) to Equal Weight and Skyworks Solutions (NASDAQ:SWKS) to Underweight on Thursday, saying that handset expectations appear overly optimistic for the coming year.

The downgrade is based on the bank's revised content assumptions for the iPhone SE4 and iPhone 17 (IP17), with more modest unit growth expected in 2024.

Barclays analysts pointed out that current market expectations for handset growth seem out of sync with reality.

They noted that consensus assumes a 10% increase in new phone units for next year, whereas Barclays expects only 5%.

For SWKS, the analysts expressed skepticism about the company's ability to recapture lost share in multiple-input multiple-output (MIMO) sockets, making a content uplift unlikely.

Barclays also sees both lower unit expectations and content headwinds for the company, particularly in China, where the Android market is becoming increasingly challenging.

The analysts believe the company will face tough conditions over the next six months, with earnings estimates falling below consensus. They forecast $6.42 in earnings per share for SWKS in 2024, compared to the Street's estimate of $6.72.

Regarding CRUS, Barclays highlighted that while the company has been a favored stock in the handset space, the recent rally has left limited upside until there is more clarity on content gains for the iPhone 18.

"CY26 should be another year of strong content uplift," the analysts said. However, in the interim, they think Street December numbers are $20M+ too high.

The bank also mentioned that tailwinds from the PC side will not be enough to drive significant growth.

Overall, Barclays suggests that the growth outlook for both CRUS and SWKS is more constrained than the market assumes.

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