Qualcomm Shares Attractive Given Potential to Generate Strong Earnings

The sell-off in Qualcomm (QCOM) amid the US and China trade war issues signals that the market has priced in a low probability that Qualcomm settles its licensing disputes or that China will approve Qualcomm’s bid for NXP Semiconductors (NXPI), Canaccord said.

Yet Qualcomm’s shares remain attractive given the potential for strong long-term earnings relative to the current valuation, the bank said.

“We believe Qualcomm can achieve management targets for 2019 non-GAAP earnings per share of $5.25 with or without NXP Semiconductors and excluding settling licensing disputes with Apple (AAPL) and Huawei,” Canaccord said.

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