Bank Of America Turns Incrementally Bullish On Qualcomm, Highlights Multiple Catalysts

QUALCOMM, Inc. QCOM's outlook as a standalone company remains favorable ahead of four potential catalysts that can help support the stock's appreciation, according to Bank of America.

The Analyst

Bank of America's Tal Liani maintains a Buy rating on Qualcomm's stock with an unchanged $75 price target. The analyst added Qualcomm to the firm's "US 1 list," which consists of "a collection of our best investment ideas that are drawn from the universe of Buy-rated US-listed stocks."

The Thesis

An incrementally positive view of Qualcomm's stock is based on four potential catalysts, Liani said in a note.

  • The company's pending merger with NXP Semiconductors NV NXPI will be EPS accretive;
  • Ongoing licensing negotiations with Huawei and Apple Inc. AAPL; if successful on both negotiating fronts and the NXP deal closes, Qualcomm's 2019 EPS could rise to $6.85 versus current consensus EPS estimate of $3.80;
  • The departure of CEO Paul Jacobs could signal "deeper changes" including a shift in licensing, restructuring, and M&A strategies; and
  • Steeper cost cutting restructuring.

The catalysts are accompanied with a certain degree of risk, especially negotiations with Apple, but also represent a "particularly attractive buying opportunity," Liani said.

Price Action

Shares of Qualcomm were trading Tuesday around $58.11.

Related Links:

Qualcomm's Days Of Supplying To Apple Appear To Be Numbered

Nomura: Qualcomm Has 'Gun To Its Head' With Broadcom's Hostile Takeover Attempt

Image credit: Kārlis Dambrāns, Flickr

Posted In: Apple Supply ChainBank of AmericaHuaweiPaul JacobsTal LianiAnalyst ColorAnalyst RatingsTech

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.