Nomura Says Qualcomm (QCOM) Could Have Done More on Buyback, Dividend

March 6, 2013 8:48 AM EST
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Price: $62.88 --0%

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    21 Buy, 24 Hold, 1 Sell

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Nomura Securities reiterated its Buy rating and $75 price target on Qualcomm (NASDAQ: QCOM) although they criticized the company's new $5 billion share repurchase plan and raised dividend.

On the buyback, analyst Romit Shah said it should have been bigger. "If executed over two years, the program would not reduce shares outstanding," he said. "Qualcomm is also trading near a trough multiple relative to semis. Furthermore, we estimate that Qualcomm’s cash balance over the next two years will grow from $28bn or 24% of the market cap to $38bn, or 33% of the market cap, assuming the share price is constant."

He also thinks Qualcomm is leaving plenty of room to raise the dividend.

The reiterated their rating and price target saying valuation is "very attractive".

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 $67.97 yesterday.

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