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 |
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