Qualcomm Inc. (NASDAQ: QCOM) felt some serious pressure after the company reported its fiscal first-quarter earnings and shares were pushed to a new 52-week low. However, this could be an inflection point, but it also could spell further trouble for Qualcomm. As a result, a couple of key analysts weighed in on the semiconductor giant.
In its most recent earnings report, Qualcomm had $0.97 in earnings per share (EPS) on $5.8 billion in revenue. That compared to consensus estimates from Thomson Reuters of $0.90 in EPS on revenue of $5.69 billion. In the same period of the previous year, the company posted EPS of $1.34 and $7.10 billion in revenue.
Merrill Lynch remains positive on Qualcomm and reiterated a Buy rating with a $75 price target. The analyst firm noted that first-quarter results beat estimates but a license dispute with LG surfaced and second-quarter guidance disappointed.
S&P Capital IQ cut its price target to $59 from $68, and it even reduced its fiscal 2016 EPS estimate to $4.05 from $4.40 and the fiscal 2017 estimate to $4.83 from $5.05. The firm noted that despite challenges at the high end of the smartphone space, it sees demand being driven by greater 3G/4G penetration in emerging markets. S&P Capital IQ thinks Qualcomm is making good progress with cost reduction efforts and notes net cash over $11 per share. It positively views recent agreements and the TDK joint venture.
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