Why This Qualcomm Analyst Is Raising Their Price Target For The Chipmaker

Zinger Key Points
  • Qualcomm analyst is more bullish on the company's stock trajectory than before.
  • The optimism is premised on the company being the sole supplier to Samsung's flagship's GS23 smartphone.
  • Qualcomm is also likely to have a higher-than-expected share for modems used in nmW version of Apple's iPhone 15.

Qualcomm, Inc. QCOM shares have shed close to 27% year-to-date amid a broader market sell-off led by tech stocks.

An analyst at KeyBanc Capital Markets is bracing up for more upside in the stock over the next 12 months.

The Qualcomm Analyst: John Vinh maintained an Overweight rating on Qualcomm shares and raised the price target from $200 to $220.

The Qualcomm Takeaways: Qualcomm will likely be the sole supplier for Samsung's next-generation flagship GS23 smartphone in 2023, Vinh said.

The reorganization plans at Samsung have led to the South Korean company moving Exynos AP development into Samsung mobile in a bid to vertically integrate, the analyst said.

"We believe Samsung plans to revamp and fix performance issues with Exynos, which we expect ~2 years to complete and to reintroduce Exynos in the GS24 in 2024."

Qualcomm is expected to increase its share at Samsung from 75% to 100% in 2023, Vinh said. 

Related Link: Qualcomm Readying Chip to Take On Apple's Newly-Unveiled M2 Processor, Says Analyst

Vinh also expects Apple, Inc. AAPL to use Qualcomm's modem in the mmW version of the iPhone 15 in 2023. As opposed to the Qualcomm management's guidance of having 20% share of the iPhone 15, the analyst said he expects the Qualcomm modem will account for 60% of the iPhone 15 volume.

Taking these two factors into consideration, Vinh raised his calendar year 2023 revenue and earnings per share estimates to $3.03 billion and $1.26, respectively.

QCOM Price Action: Qualcomm shares are down 3.17% at $128.98 in premarket trading Monday, according to Benzinga Pro data.

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