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Qualcomm on the Street: The Analysts’ Take

Puja Tayal - Author
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Nov. 6 2017, Updated 10:30 a.m. ET

Analysts’ recommendations

Wall Street analysts have maintained a consensus “hold” recommendation for Qualcomm (QCOM) stock because the company’s temporary headwinds appear to be under control, while the overall industry (SPY) demand environment remains positive.

Of the 25 analysts monitoring Qualcomm stock, 44% recommend a “buy,” and 56% recommend a “hold.” The consensus price target for the stock is $60, and the stock is currently trading at a discount of 9%.

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Analysts’ price target for Qualcomm

The impact of the company’s legal headwinds was visible in the bullish price targets. Analysts reduced the bullish price target for Qualcomm from $75 in May 2017 to $70 in October 2017.

On the other hand, analysts are bullish on rival Broadcom (AVGO) and Qualcomm’s acquisition target NXP (NXPI). They raised their consensus price target for Broadcom from $250 in May 2017 to $290 in October 2017 because the stock crossed that target and is currently trading at $252.9.

Analysts raised their bullish price target for NXP from $110 to $125 after the stock crossed the previous target. The stock is now trading at $116.9.

Remember, analysts calculate a price target by applying a price ratio to their estimates for the company’s earnings and cash flows for the next few quarters. The price target represents the best outcome an investor can hope to get from the stock. But analysts change their price targets frequently based on the most recent events in the company’s business.

Analysts seem to believe that Qualcomm has the capability to withstand near-term headwinds and grow in the long term.

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