Wells Fargo downgrades Qualcomm to Underweight with $105 price target

As previously reported, Wells Fargo analyst Gary Mobley downgraded Qualcomm (QCOM) to Underweight from Equal Weight with a price target of $105. The analyst believes that once investor sentiment toward the chip sector turns more positive, or once investors are convinced of a trough in the chip cycle, shares of companies with high smartphone exposure should underperform the broader chip sector. Mobley thinks Qualcomm’s shares will continue to trade at a discount to peers because investors will assign lower multiples to chip companies serving the no-growth mobile handset market, and investors may begin to value Qualcomm’s shares based on EPS power ex. MSM/RFFE shipments to Apple (AAPL).