Can Qualcomm Breakout With Its Q4 Report?

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Qualcomm Inc. (NASDAQ: QCOM) is set to report its fiscal fourth-quarter results after the closing bell on Wednesday. The consensus estimates are calling for $0.71 in earnings per share (EPS) and $4.7 billion in revenue. The same period of last year reportedly had $0.90 in EPS and $5.83 billion in revenue.

This company continues to have significant wins from 5G. After all, ever faster connections are going to require ever better processors for smartphones, where Qualcomm has a substantial premium to rivals.

The big overhang remains how Apple and Qualcomm will treat each other in the future. Apple would love to avoid entirely using the premium Qualcomm chipsets and the antitrust issues, suits and settlements that frankly are hard to predict how they will turn out in the future. That said, a new iPhone refresh cycle, and an iPhone professional version, offer Qualcomm significant business ahead, on top of all the other devices outside of Apple products that can bring future connectivity to 5G. Qualcomm comes with caveats, but the history of the company and its aim to diversify would indicate that Qualcomm won’t sit on the sidelines on the 5G opportunities in the coming years.

A wave of analyst upgrades in April was followed by one of analyst downgrades over the summer, which has kept Qualcomm’s share price in limbo.

Overall, Qualcomm has outperformed the broad markets, with its stock up about 50% year to date. In the past 52 weeks, the stock is up closer to 35%.

A few analysts weighed in on Qualcomm ahead of the report:

  • Canaccord Genuity has a Buy rating and an $87 price target.
  • Mizuho has a Hold rating with a $68 target price.
  • Morgan Stanley rates it at Buy with an $89 target.
  • DZ Bank has a Sell rating on the shares.
  • Merrill Lynch’s Buy rating comes with a $100 target.
  • Deutsche Bank has a Hold rating and a $75 price target.

Shares of Qualcomm traded at $85.09 on Wednesday, in a 52-week range of $49.10 to $90.34. The consensus price target is $79.35.


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