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QUALCOMM Incorporated Message Board

  • investora2z investora2z Jun 7, 2013 6:46 AM Flag

    Rangebound movement likely

    A seekingalpha article gave a target price of $129 for Qualcomm for 2018. The forecast was based on historical averages related to earnings growth and dividend yields. The calculations implied an average return of 16.2% over the next 5 years. Though this may not be too great, it does indicate that the growth may remain steady. This is just a estimation, so actual performance may be significantly different. Meanwhile, the stock is looking weak after it broke down from a narrow range. The stock has now corrected around 8-9% from the recent highs. A little bit more correction can be expected to take the stock to the lower end of the range. Fundmentals are expected to remain strong over the next few quarters as there is expectation of good growth from China. The rollout of 4G licenses is expected to increase demand for mobile chips over the next few quarters due to handset replacements. But for the stock to cross recent highs and move beyond historical highs, there has to be a significant fundamental push. The guidance for revenue growth for the full year is around 30% and the earnings are expected to grow between 8-10%. If it can beat the analysts estimates, then the stock can get a strong push. There is also the patent infringement lawsuit filed by Parkervision which is likely to move through crucial stages during the next few quarters. The Parkervision management expects the claims to be around $350 million. The size of the patent lawsuits is increasing all the time with even smaller companies filing big lawsuits. For example, MGT Capital Investments (MGT) filed a multi-billion dollar lawsuit against much bigger casino gaming companies. Qualcomm may be expected to remain subdued till the next major trigger, and a rangebound movement is likely.

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