Goldman Sachs Removes Qualcomm (QCOM) from CL-Buy List

Goldman Sachs downgraded Qualcomm (NASDAQ: QCOM) from Conviction Buy to Buy with a price target of $95.00 (unchanged). Analyst Simona Jankowski thinks catalyst have played out. June and Sept. quarter estimates were trimmed.

"We are removing Qualcomm from the Americas Conviction List (CL), as the catalysts laid out in our November 12, 2013, note have largely played out (more aggressive capital allocation, chipset margin expansion, "stronger for longer" chipset segment, and resilient royalty ASPs). Looking out from here, we do not expect material upside to consensus estimates in the intermediate term and may even see some near-term downside. However, we maintain our Buy rating, as in our view the stock is undervalued relative to its growth and returns profile," said Jankowski

"We are trimming our June and September quarter estimates to reflect a weaker handset demand environment in the June quarter, which we think is attributable to three factors: (1) a lull ahead of the much-anticipated iPhone 6 launch, (2) weaker 3G shipments in China ahead of a steeper 4G ramp in 2H, and (3) softer demand in Europe. We view all of these issues as transitory and not thesis changing over the longer term, but they may drive a near-term pause in the stock’s outperformance," added the analyst.

For an analyst ratings summary and ratings history on Qualcomm click here. For more ratings news on Qualcomm click here.

Shares of Qualcomm closed at $80.43 yesterday.

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