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Qualcomm: Another Solid Print and Guide on the Way, Says Deutsche Bank
Stock Analysis & Ideas

Qualcomm: Another Solid Print and Guide on the Way, Says Deutsche Bank

While not immune to the current stock market’s volatile environment, the past 3 months have seen Qualcomm (QCOM) shares add 27% of muscle, a far better return than the SOX’ 3.5% haul and way above the S&P’s flat performance.

Deutsche Bank’s Ross Seymore puts the strong display down to investors’ “positive reaction to the multitude of positive announcements at QCOM’s November Analyst Day (7x TAM expansion, FY22 EPS rise >20% y/y, increase in diversification and reliance away from high customer concentration) and January CES event (multiple engagements and design-wins for Auto, Metaverse, PC and 5G wireless fiber).”

Let’s also keep in mind, the company has been posting some excellent quarterly results. And when the chip giant reports F1Q22’s (December quarter) financials early next month (February 2), Seymore expects Qualcomm to build on F4Q’s “momentum” and once more deliver a “solid” report.

The 5-star analyst expects the company to show revenues of $10.60 billion, amounting to a 14% sequential increase and coming in above the consensus estimate of $10.44 billion. The figure is also higher than the midpoint of QCOM’s $10.0-10.8 billion guidance range. On the bottom-line, Seymore anticipates PF EPS of $3.05, which is toward the high-end of the $2.90-$3.10 guide and a touch above the Street’s $2.99 forecast.

Looking ahead to F2Q, while the analyst anticipates a “seasonally softer” quarter with handset revenues declining, he still anticipates a “solid” guide, anticipating growth in Automotive, RFFE and IoT.

Overall, at a time of rising “sector-wide cyclical concerns,” Seymore believes QCOM’s habit of delivering “solid earnings beats/raises,” will continue, leading to “further appreciation in its relatively undervalued shares.”

Accordingly, Seymore rates QCOM shares a Buy along with a $210 price target. Should the analyst’s thesis go according to plan, investors will be sitting on one-year returns of 26%. (To watch Seymore’s track record, click here)

Turning now to the rest of the Street, where the bulls outnumber the fence sitters, but only just; the stock has a Moderate Buy consensus rating, based on 12 Buys and 9 Holds. The average price target currently stands at $198.11, suggesting returns of ~19% in the year ahead. (See Qualcomm stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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