Qualcomm slips as Daiwa downgrades on weak China rebound, consumer demand
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Qualcomm (NASDAQ:QCOM) shares slipped fractionally in pre-market trading on Wednesday after investment firm Daiwa Capital downgraded the semiconductor firm, citing weakness in the Chinese market and overall consumer demand. 
"The issues of prior quarters remain; China not seen a rebound, overall consumer demand is weak, high inventory levels and Apple bought product more heavily earlier in the year," analyst Louis Miscioscia wrote in an investor note. Miscioscia lowered his rating on Qualcomm (QCOM) to outperform from buy, but kept his $125 price target. 
Miscioscia also noted that with Huawei starting to ship 5G phones, Qualcomm (QCOM) will lose roughly $1B in recurring revenue, as it only has a 4G license in China.
Despite the downgrade, Miscioscia said he still views Qualcomm (QCOM) as having long-term growth potential, notably from automotive and internet of things. However, automotive is only 6% of the company's QCT revenue and while IoT accounts for 20%, the company still needs a rebound in the macro economy and global consumer. 
Earlier this month, Qualcomm (QCOM) reported mixed third-quarter results and weaker-than-expected guidance.
Analysts are largely bullish on Qualcomm (QCOM). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates QCOM a HOLD.
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