Qualcomm’s (NASDAQ:QCOM) higher inventory, which is a result of lower customer demand, may be a challenge for the company in the second quarter, according to analysts at Morgan Stanley.
Morgan Stanley said it is lowering its 2023 revenue estimate for the semiconductor company to $36.924 billion from its previous forecast of $38.579 billion. The firm also lowered its estimates for adjusted EPS to $9.04 from $9.97.
“As we think about FY23 revenue, we are modeling low double-digit declines in royalties, and high teens declines in semiconductors, largely reflecting a meaningful inventory digestion in the first half of the year,” the analysts said.
Morgan Stanley still raised its price target on Qualcomm’s (NASDAQ:QCOM) stock to $145 a share from $126, while maintaining its overweight rating.