Qualcomm (QCOM) Presented an Upbeat Outlook, But Investor Credit Remains Limited

Last week, Qualcomm (NASDAQ: QCOM) held its first Automotive Analyst Day, where it unveiled its Snapdragon Ride Flex SoC.

In reaction to the investor day, analysts last week provided positive commentary. This week, analysts at JPMorgan and Jefferies provided their commentary on the event.

Jefferies analyst Kyle McNealy maintained a Hold rating on Qualcomm but cut its price target on the stock to $140 from $160 per share.

McNealy told investors in a note that "Qualcomm presented an upbeat outlook for their automotive opportunity."

"While we like the building momentum in autos with design wins and TAM expansion, big step-ups in the revenue opportunity are still a number of years away. We're still held back by the building macro headwinds management has called out and the time it will take for growth in Autos and IoT to meaningfully offset any deceleration in Handsets," added the analyst.

Meanwhile, JPMorgan's Samik Chatterjee said they are "taking a fresh look at Qualcomm's successful diversification, on the heels of the recent Automotive Investor Day, even as credit from investors remains limited to-date."

"The discounted multiples for QCOM shares indicate that not only is the company getting limited credit for its diversification, but also that investors are concerned about limited visibility into smartphone revenues in the backdrop of uncertainty around inventory digestion in the component supply chain," added Chatterjee, who maintained an Overweight rating and $185 price target on the stock.

By Sam Boughedda

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