Mark McKechnie, Evercore Partners: Reiterates an Overweight rating, and a $75 price target. “We see AAPL’s product transition as largely responsible for a soft-patch in both QTL (AAPL 25% of QCOM’s royalty base) and QCT (lower units but better ASPs on the mix shift from AAPL thin-modems to Samsung / Other integrated parts). We view the pause as temporary, but with few potential catalysts for QCOM until the other side of summer. We find the stock attractive in the low 60’s / high 50’s – $60 would represent 12x our FY14 estimate of $4.90 (unchanged), or 8x plus $17 of net cash per share. We suspect the sharp after- hours drop is due to inflated expectations for QCT units going into the report. We do not subscribe to the bear-case of low-end share loss in China as the root cause for QCOM’s muted results.” McKechnie raised his fiscal ’13 view to $24.36 billion in revenue and $4.55 in EPS from a prior $23.91 billion and $4.50 per share.
Daniel Berenbaum, MKM Partners: Reiterates a Buy rating, and a $74 price target, writing that investors should buy the stock “when the smoke clears.” “esults and guidance were solid, but investor concerns that revenue growth will outstrip EPS growth drove the stock down 5% after hours. We recognize that opex and chipset margins are an ongoing concern, but with the stock at 14x our CY14 pro-forma EPS estimate (incl. stock-comp), revenue growing at nearly 30%, 25% of market cap in cash, and tailwinds from LTE likely to continue for the next several years, we recommend that investors buy the stock on weakness.” Berenbaum raised his 2013 view to $24.5 billion and $4.48 per share from a prior $23.9 billion and $4.37.
Kulbinder Garcha, Credit Suisse: Reiterates an Outperform rating and an $85 price target. “While some maybe disappointed in the near term EPS upside, we believe trends remain solid, evidenced by FY guidance increase. Qualcomm is set to benefit from its heavy levels of historic investments in LTE, which will provide sustainable competitive advantages over time. This, along with rising smartphone growth, should drive a LT EPS CAGR of 17%.”