CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We up our 12-month target price to $132 from $125 on P/E of 13x our CY 25 EPS view of $10.27, below historical/peers to reflect tough end-market conditions. We keep our FY 24 (Sep.) EPS at $9.45 and start FY 25 at $10.16. QCOM posts Sep-Q EPS of $2.02 vs. $3.13, beating the $1.91 consensus. Sales fell 24%, slightly worse than expected, with declines of 12% from licensing (QTL) and 26% within its chip manufacturing business (QCT). While we are encouraged by the better than feared results/Dec-Q guide, we think this heavily reflects seasonality/Android ecosystem rebound as QCOM is no longer undershipping demand given more normalized channel inventories. Still, we are wary of upside as handset end-demand (-27% in Sep-Q; 74% of QCT revenue) is likely to remain anemic in CY 24. We like secular prospects for automotive (+15%; 7% of sales), while the extension of the Apple supply agreement in Sept. provides better revenue visibility over the next two years. On-device AI at the edge offers a new emerging opportunity.