Qualcomm gets PT boost from J.P. Morgan as earnings show 'outsized growth opportunities'
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Qualcomm (NASDAQ:QCOM) received some positive commentary from Wall Street on Thursday, as J.P. Morgan boosted its price target on the San Diego-based chipmaker following strong first-quarter earnings and guidance.
Analyst Samik Chatterjee raised his price target to $240 from $225, noting that the results and guidance for the next quarter "brought forward further confirmation of the solid roadmap already laid out by the management team at the November analyst day to leverage outsized growth opportunities."
For the period ending December 26, Qualcomm said it earned $3.23 per share on $10.7 billion in revenue, up 30% year-over-year. A consensus of Wall Street analysts expected Qualcomm to earn $3 per share on $10.43 billion in revenue during the period.
For the second quarter, Qualcomm said it expects to generate between $10.2 billion and $11 billion in revenue, with earnings coming in between $2.80 and $3 per share. Analysts expected the company to earn $2.48 per share on $9.54 billion in revenue.
Despite the earnings beat and guidance boost, Qualcomm (QCOM) shares fell in pre-market trading on Thursday, down slightly more than 1% to $185.94.
Chatterjee added that Qualcomm showed "better than expected leverage" in its growth drivers, which include share gains in Android smartphones, automotive and Internet of Things, since the company's analyst day in November, which caused him to raise his earnings estimates.
"It is worth highlighting that Qualcomm is delivering +40% EPS growth in a year which was largely regarded by investors to be a âcliffâ year on lapping 5G smartphone content increases and doubling of the EPS in FY21, led by the strength of the portfolio and leverage of the one technology platform across multiple end-markets," Chatterjee explained.
Last month, Qualcomm (QCOM) was picked by Goldman Sachs as one of the top stock picks for tightening financial conditions, due to its strong free cash flow, high margins and rock-solid balance sheet.