Qualcomm: Color on Quarter (86.37)
- Canaccord Genuity raises their QCOM tgt to $105 from $89. Qualcomm reported Q2/F'19 results with revenue of $5B above the midpoint of guidance and non-GAAP EPS of $0.77 above the high end of guidance with the beat driven by strong QTL results and solid QCT execution. Based on Q3/F'19 QTL guidance, they estimate Qualcomm will receive royalties of roughly $7.50 per iPhone or better than their previous $5 estimate. With Huawei currently making partial $150M quarterly payments to Qualcomm, they anticipate Huawei could settle soon now that Apple (AAPL) has settled and pay Qualcomm closer to its original agreement from 2014. They believe a settlement and new licensing deal with Huawei could serve as an additional catalyst for upside to our estimates. With 5G network builds starting to ramp around the world in 2019 and the settlement protecting Qualcomm's long-term licensing business model, they believe Qualcomm is well positioned to benefit with increasing smartphone market share with leading Android OEMs as 5G smartphone shipments ramp in 2H/19 and beyond.
- Cowen raises their QCOM tgt to $100 from $91. Firm notes Apple re-enters QTL, and initial 5G chipsets boost ASPs, but the impact is muted by well-known smartphone market softness. They see a meaningful earnings inflection in C2020 on: 1) regained Apple chipset sales; 2) 5G taking a material portion of a stabilized smartphone market; and 3) Huawei settlement. LT thesis intact of the leading 5G pure-play
- BAML upgraded to Buy from Neutral
- Raymond James upgraded to Strong Buy from Outperform; tgt raised to $115