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Analysts Look for All-Time Highs on Qualcomm, Intel Rivalry Odds

Jon C. Ogg

Qualcomm Inc. (QCOM) could be headed to new all-time highs if analyst research predictions come true. In the past two days we have seen two very positive analyst research reports on the heels of a post-earnings drop in the stock. We have something else to consider here, and that is how Qualcomm stacks up against Intel Corp. (INTC) now that Intel is starting to make something of an appearance in the smartphone and tablet markets.

On Wednesday came a note from Goldman Sachs on Qualcomm. The report only maintained a Buy rating, but this effectively raised that rating to Strong Buy. The driving force is that the stock was added to Goldman Sachs' prized Conviction Buy List. The firm is targeting $80 per share.

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Jefferies had just given Qualcomm a very positive rating on Tuesday. The firm initiated coverage with a Buy rating, and it also assigned an $80 price target, just like Goldman Sachs.

Qualcomm closed at $68.51 on Tuesday, and shares were up 1% at $69.23 in early morning trading on Wednesday. The Thomson Reuters consensus price target is $74.73, but we would point out that the street high price target is actually $90.00 for the stock.

Here is where things get tricky on calling for all-time highs. Qualcomm shares very briefly traded as high as about $88 back during the technology bubble of 1999 and 2000. The calculations on true highs are not always reflected in the adjusted share prices, and Qualcomm has paid nearly $6.50 per share in common dividends to its shareholders in the past 10 years.

You just have to remember how crazy valuations became back in the tech bubble. Here are the comparisons to Intel Corp. (INTC):

  • Qualcomm market cap $117 billion / Intel market cap $121 billion
  • Qualcomm expected annual sales $27 billion / Intel expected annual sales $52.6 billion
  • Qualcomm at 4.3 times expected sales / Intel at 2.3 times expected annual sales
  • Qualcomm forward P/E ratio 13.7 / Intel forward P/E ratio 12.6
  • Qualcomm dividend yield 2.1% / Intel dividend yield 3.7%

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