Arm price target lowered to $170 from $205 at Jefferies

Jefferies lowered the firm’s price target on Arm (ARM) to $170 from $205 and keeps a Buy rating on the shares. Despite strong results and guidance, Arm shares are coming under pressure on worries about the impact of rising memory prices on smartphone volumes, the analyst tells investors. However, the recent sharp increase in memory prices is widely expected to impact the low-to-mid-end of the smartphone market, but high-end smartphone chips are the primary and increasing users of both v9 and CSS, which is contributing to Arm’s rising royalty rate and royalties are skewed on an absolute basis to high-end smartphones due to their higher chip average selling prices, the analyst says.