Qualcomm (QCOM) had quite a showing at Mobile World Congress (MWC) in Barcelona late last month. The company showed off its success in the 5G sphere, and many industry experts believe the company has put itself in great position to be a leader in the 5G market. Yet, while the company is gaining ground in the new network, it continues in its legal battle with Apple and awaits a decision by the FTC regarding its monopoly charge.
Even with the potential of a negative decision by the FTC, Barclays analyst Blayne Curtis maintains his Overweight rating on the stock, with a $70 price target, suggesting the stock can rise 25% from its current level around $56 per share. (To watch Curtis’ track record, click here)
Curtis acknowledges that the impending FTC decision has made the the stock trade sideways and recognizes some sort of negative ruling is needed for the stock to move forward. But even with such a judgement, the analyst remains confident in Qualcomm moving forward as meetings at MWC “only further confirmed our view of just how far ahead QCOM is in 5G modems.”
Curtis says, “5G came a year early led by handsets for the first time, which is now in turn, driving operators to accelerate plans.” He reports that there are already 22 5G operators in 60 markets, including 30 devices and 28 smartphones. Curtis says “Verizon [is] deploying Bands 28/39 and T-Mobile [is] eying mmWave along with 600MHz…[with] Sprint…deploying Band 31 (2.5-2.6GHz).” As networks will be able to carry 5G smartphones, Curis “expect[s] QCOM to be featured in the vast majority of the handsets on these carriers.”
Another outstanding issue for Qualcomm is the potential for a settlement with Apple. Curtis says, “the sides still seem far apart with a continued volley of patent and ITC disputes but from our perspective, the burden is on [Apple] if they want to have a 5G phone in 2020,” which shows how strong a position Qualcomm is in in the 5G market. By needing to rely on Qualcomm, the analyst believes Apple will need to settle — and settle soon — which many expect to be a boon to Qualcomm revenue.
The investment community remains optimistic on Qualcomm, even with the impending FTC-case ruling and yet-to-happen Apple settlement. TipRanks analysis of 15 analyst ratings on the stock shows a consensus Moderate Buy rating with an eight analysts Buying and seven analysts recommending Hold. There is a $62.54 average private target on the stock, representing a 14% rise from current levels. (Get TipRanks’ free stock analysis report on QCOM)