Canaccord’s top analyst Michael Walkley was out pounding the table on shares of Qualcomm (NASDAQ:QCOM) Wednesday, reiterating a Buy rating and price target of $75, which implies an upside of 32% from current levels.
Walkley wrote, “Given the sell-off in Qualcomm amid the US and China trade war issues, we believe the market has priced in a low probability China will approve Qualcomm’s bid for NXP or Qualcomm settles its licensing disputes. However, we view the shares as attractive given the potential for strong long-term earnings potential relative to the current valuation. We believe Qualcomm can achieve management targets for $5.25 in F2019 non-GAAP EPS with or without NXP and excluding settling licensing disputes with Apple and Huawei. Therefore, we reiterate our BUY rating despite the uncertain timing and outcomes for the potential acquisition of NXP and settling licensing disputes with Apple and Huawei.”
“We do view the July deadline to close NXP as positive for the shares, as removing this uncertainty should prove a positive catalyst even without the accretive acquisition. Further, we view the more transparent licensing business ahead of 5G as a positive development to extend licensees to include 5G and potentially improve the timing and outcomes for licensing disputes with Apple and Huawei. Therefore, we believe Qualcomm is an attractive investment opportunity for longer-term investors during this time of uncertainty,” the analyst concluded.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Michael Walkley has a yearly average return of 17.3% and a 63% success rate. Walkley has a -0.6% average return when recommending QCOM, and is ranked #84 out of 4801 analysts.
Overall, Wall Street seems to be divided on the stock as 6 analysts recommend buying shares of Qualcomm, 6 remain sidelined, and only one is bearish. The average 12-month price target between these 13 analysts is $62.40, marking a 9% potential upside from current levels.