Financial markets edged higher this morning after a catastrophic trading session on Wednesday. Among the equities in focus are action camera giant GoPro Inc (NASDAQ:GPRO) and wireless chip giant QUALCOMM, Inc. (NASDAQ:QCOM). Here’s a quick roundup of today’s brokerage notes on GPRO and QCOM.
After GoPro cut its sales guidance and announced staff layoffs, Erinn Murphy of Piper Jaffray reiterated her Underweight company on the stock yesterday and cut her price target from $15 to $9. This move comes after the company announced Q4 sales estimates of $435 million, well below the analyst’s estimate of $472 million and even further below the general consensus of $521 million.
Furthermore, the company announced it will be letting go of 7% of its workforce, currently comprised of more than 1,500 people. Murphy comments, “While the layoffs should alleviate some expense pressure, the company remains committed to investing behind the brand–both on the R&D side and the marketing side.” The analyst continues, “We still anticipate the company to launch Karma (quadcopter) in 1H and note there is likely a new camera device to hit in FY16. Given the challenges with the timing of the Session launch, we’d anticipate the latter launch to be more aligned with a traditional consumer electronics launch time frame. While product newness could be a catalyst, we are taking a wait-and-see approach given the execution missteps of 2015.”
Consequently, the analyst is lowering her Q4 EPS from $0.28 to ($0.01). Murphy concluded, “We would anticipate the next few quarters to remain challenging as the company balances inventory clean up with the current run-rate of demand.”
According to TipRanks, 6 analysts are currently bullish on GoPro, 2 are bearish, and 6 remain neutral on the stock. The average 12-month price target between these 14 analysts is $16.92, marking a 41% potential upside from current levels.
Yesterday, Qualcomm and TDK Corporation announced a joint venture to develop RF technologies for mobile devices, Internet of Things, and drones. Romit Shah of Nomura commented, “We think the JV could address RF requirements in entry 3G/4G mobile devices in the near term. We don’t see any meaningful impact from this on Avago, which provides higher performance FBAR filters for high-tier LTE devices.”
Shah explains that the joint venture will draw on “TDK’s competencies in RF (RF filtering, packaging and module integration) and QCOM’s expertise in wireless technology. Through the JV, QCOM is expected to strengthen RF filters (supporting a stronger fully integrated system) for its RF360 platform.”
In light of this joint venture, Shah reiterates his Neutral rating on Qualcomm with an unchanged price target of $55. According to TipRanks, 12 analysts are bullish on the semiconductor company while 7 remain neutral. The average 12-month price target between these 19 analysts is $61.65, marking a 32% potential upside from current levels.