On Thursday, Piper Sandler adjusted its outlook on Qualcomm (NASDAQ:QCOM) shares, increasing the price target to $205 from $185, while maintaining an Overweight rating.
The revision follows Qualcomm's recent financial report, which surpassed expectations in terms of revenue and earnings per share (EPS) for the June quarter and provided guidance for September that continued to impress.
Qualcomm's performance was notably bolstered by robust demand from Android manufacturers, as well as anticipated growth from a modem-only customer.
An additional week in the September quarter is expected to balance the earlier-than-anticipated cessation of Qualcomm's license to sell to Huawei. This license was initially projected to be valid until closer to the year's end.
The company's automotive business displayed significant growth, although forecasts suggest a flat trajectory for the upcoming September quarter.
Meanwhile, Qualcomm's ventures in AI for personal computers are progressing positively, with management projecting that over 50% of all PCs will be AI-capable by 2027.
Piper Sandler's analyst underscored Qualcomm's strategic positioning, pointing to its strength across various segments. The firm's confidence in Qualcomm's trajectory is reflected in the reiterated Overweight rating and the raised price target to $205.
In other recent news, Qualcomm, a leading semiconductor company, has been the subject of several analyst revisions and anticipates robust fourth-quarter earnings.
Piper Sandler and JPMorgan have increased their price targets on Qualcomm shares to $205 and $235 respectively, maintaining an Overweight rating for both.
This follows Qualcomm's recent financial report that exceeded revenue and earnings per share expectations. The company's performance was significantly bolstered by robust demand from Android manufacturers and anticipated growth from a modem-only customer.
Meanwhile, Baird has increased its price target on Qualcomm to $250, citing positive channel feedback on the anticipated demand for the upcoming iPhone 16 and the successful initial shipments of X Elite for Copilot+ PCs.
However, HSBC downgraded its rating from Buy to Hold, despite raising its price target to $200, due to mixed reviews of Qualcomm's AI PC models and a downward revision in the expected shipment of AI CPUs for fiscal year 2024.
Qualcomm projects its fourth-quarter revenue to surpass Wall Street predictions, attributing this to robust demand for high-end Android devices and an increase in chips used in AI-enhanced smartphones. For the adjusted earnings of the fourth quarter, Qualcomm projects a midpoint of $2.55 per share, ahead of the forecasted $2.45 per share.
The company's chip segment also expects to see sales reaching a midpoint of $8.4 billion, topping analyst predictions. These recent developments reflect the company's strategic positioning and growth trajectory.
InvestingPro Insights
Following Piper Sandler's upbeat assessment of Qualcomm, the InvestingPro data offers further insight into the company's financial health and market position. Qualcomm's market capitalization stands at a robust $201.94 billion, and the company's trailing twelve-month P/E ratio is at 23.55, with a slight adjustment to 22.97 when considering the last twelve months as of Q2 2024. Despite a revenue decline of 11.35% over the same period, Qualcomm has managed to maintain a gross profit margin of 55.81%, showcasing the company's ability to retain profitability even amidst revenue fluctuations.
InvestingPro Tips highlight Qualcomm as a prominent player in the Semiconductors & Semiconductor Equipment industry, with a track record of raising its dividend for 21 consecutive years and maintaining dividend payments for 22 consecutive years. This consistency underlines the company's financial stability and commitment to shareholder returns. Furthermore, with Qualcomm's liquid assets exceeding short-term obligations and operating with a moderate level of debt, the company's financial footing appears solid.
For investors seeking more detailed analysis, there are additional InvestingPro Tips available, which can provide deeper insights into Qualcomm's valuation metrics, such as its high Price/Book multiple, and future profitability predictions. To explore these tips, visit https://www.investing.com/pro/QCOM.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.