Morgan Stanley

Morgan Stanley reported that Qualcomm’s (NASDAQ:QCOM) growth guidance for the quarter ending March was roughly in line with market expectations, which is expected to help alleviate investor anxiety, but the company’s management also stressed that the difficult operating environment will persist, so it lowered its forecast for the quarter ending June accordingly. Revenue forecast for fiscal 2023 ended September this year decreased to $36,924 million from $38,579 million, and non-GAAP earnings per share forecast of $9.04, taking into account a low-double-digit decline in the patent licensing business (QTL) and a decline of more than 15% in the semiconductor business (QCT). The bank expects Qualcomm to achieve meaningful inventory digestion in the first half of this year, and expects to improve its operations in the second half of this year, and instead raises its target price from $126 to $145 based on its 2024 operating forecast.

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.