Qualcomm dips as J.P. Morgan cuts earnings estimates, PT on weak smartphone outlook
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Qualcomm (NASDAQ:QCOM) shares dipped in premarket trading on Tuesday as investment firm J.P. Morgan cut its earnings estimates and price target on the semiconductor company, citing a weaker smartphone outlook.
Analyst Samik Chatterjee lowered his price target to $205 but kept his overweight rating on Qualcomm, noting that despite the firm's best efforts to diversify, including its recent Arriver acquisition, a weaker global outlook for the smartphone market are likely to hurt the company's earnings.
"Qualcommâs strong share gains with Android smartphone [original equipment manufacturers] in 2022, greater exposure to high-end smartphones, as well as the opportunity to divert supply to non-handset end markets will provide offsets to the broader slowdown in the smartphone market," Chatterjee wrote in a note to clients.
"That said, the softer outlook for the smartphone market will drive softer [Qualcomm Technology Licensing] revenues as well as a slight moderation in our [Qualcomm CDMA Technologies] revenue and margin forecasts, despite the offsets on a company-specific basis." 
Qualcomm (QCOM) shares slipped slightly more than 0.5% to $152.71 in premarket trading on Tuesday. 
In addition, Chatterjee noted that Qualcomm (QCOM) has continued to diversify its business away from just smartphones and should perform better than its peers, amid slower consumer spending.
Nonetheless, Chatterjee lowered his 2022 earnings estimates to $11.70 per share, compared to a consensus of $11.84 per share.
However, a more diversified Qualcomm is likely to see "tailwinds" in the future, with Chatterjee raising his earnings estimates in 2023 and 2024 to $12.80 and $14.20 per share, compared to a consensus outlook of $12.59 and $13.33, respectively. 
On Friday, Qualcomm (QCOM) shares fell sharply after J.P. Morgan removed the semiconductor company from its Analyst Focus List and concerns popped up over the slowing Chinese smartphone market.