AmTech Raises Price Target on Qualcomm (QCOM) to $60
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American Technology Research raises its price target on Qualcomm (Nasdaq: QCOM) to $60 and maintains a Buy rating.
The firm sees Qualcomm's opportunity within the Chinese telecom market as substantial, saying that it could add as much as $0.15-$0.30 in EPS power by 2010/2011. AmTech recently met with Qualcomm's CEO, Paul Jacobs, and notes that while no updates on guidance have been given lately, the firm believes Qualcomm's near-term business remains intact as "body language appears in-line." The exec was "encouraged by recent developments in China" as recent trends in the telecom industry are signaling competition should increase.
AmTech believes Qualcomm's stock currently has two main drivers: business fundamentals and legal/royalty battles. The firm feels "fundamentals alone support current valuations" even though the company is not yet receiving royalty payments from Nokia (NYSE: NOK). AmTech believes that Nokia will announce an agreement over the next 3-18 months and will eventually pay Qualcomm 2%+ royalties.
The firm's $60 price target on Qualcomm is based on 20x its FY09/10 EPS power estimate of $2.60 plus $0.30 from the opportunities in China.
QUALCOMM Incorporated designs, manufactures, and markets digital wireless telecommunications products and services based on its CDMA technology and other technologies.
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