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Bank Of America Turns Incrementally Bullish On Qualcomm, Highlights Multiple Catalysts

QUALCOMM, Inc. (NASDAQ: QCOM)'s outlook as a standalone company remains favorable ahead of four potential catalysts that can help support the stock's appreciation, according to Bank of America.

The Analyst

Bank of America's Tal Liani maintains a Buy rating on Qualcomm's stock with an unchanged $75 price target. The analyst added Qualcomm to the firm's "US 1 list," which consists of "a collection of our best investment ideas that are drawn from the universe of Buy-rated US-listed stocks."

The Thesis

An incrementally positive view of Qualcomm's stock is based on four potential catalysts, Liani said in a note.

  • The company's pending merger with NXP Semiconductors NV (NASDAQ: NXPI) will be EPS accretive;

  • Ongoing licensing negotiations with Huawei and Apple Inc. (NASDAQ: AAPL); if successful on both negotiating fronts and the NXP deal closes, Qualcomm's 2019 EPS could rise to $6.85 versus current consensus EPS estimate of $3.80;

  • The departure of CEO Paul Jacobs could signal "deeper changes" including a shift in licensing, restructuring, and M&A strategies; and

  • Steeper cost cutting restructuring.

The catalysts are accompanied with a certain degree of risk, especially negotiations with Apple, but also represent a "particularly attractive buying opportunity," Liani said.

Price Action

Shares of Qualcomm were trading Tuesday around $58.11.

Related Links:

Qualcomm's Days Of Supplying To Apple Appear To Be Numbered

Nomura: Qualcomm Has 'Gun To Its Head' With Broadcom's Hostile Takeover Attempt

Image credit: Kārlis Dambrāns, Flickr

Latest Ratings for QCOM

Mar 2018

Morgan Stanley

Reinstates

Underweight

Mar 2018

Deutsche Bank

Maintains

Hold

Hold

Mar 2018

Deutsche Bank

Reinstates

Hold

View More Analyst Ratings for QCOM
View the Latest Analyst Ratings

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© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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