Last week, Qualcomm (NASDAQ:QCOM) announced that it will begin a specialty auction to repurchase up to $10 billion of its shares, a move to salvage shareholder value after inaction by Chinese regulators doomed the company’s planned acquisition of Dutch chip maker NXP Semiconductors.
RBC Capital analyst Amit Daryanani commented, “We think this offer could reduce share count by ~148-167M and increase Sept-qtr EPS by ~10c. This offer represents the first meaningful step in QCOM’s up to ~$30B buyback program, and we expect it to execute more buybacks (open market + structured programs) in the future. Net/Net: We are encouraged by QCOM’s announcement, and believe this offer could meaningfully accelerate the share reduction and EPS accretion. On the legal dispute front, we believe QCOM is making progress with payment from the 2nd licensee in dispute and upcoming key legal dates.”
As such, Daryanani reiterates an Outperform rating on Qualcomm shares, with a price target of $73, which represents a potential upside of 11% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Amit Daryanani has a yearly average return of 25.3% and a 81.9% success rate. Daryanani has a 9.0% average return when recommending QCOM, and is ranked #21 out of 4846 analysts.
The initial word out on the Street echoes Daryanani’s bullish conviction on the wireless chip giant, as TipRanks analytics showcase QCOM as a Buy. Based on 13 analysts polled in the last 3 months, 8 are bullish on Qualcomm stock, 4 are sidelined and 1 remains bearish. The 12-month average price target stands at $68.36, marking a 4% upside from where the stock is currently trading.
Qualcomm invents breakthrough technologies that transform how the world connects, computes and communicates. When we connected the phone to the Internet, the mobile revolution was born. Those inventions are the foundation for life-changing products, experiences, and industries.