Bernstein Lowers Qualcomm Price Target to $200

Bernstein SocGen Group analyst Stacy Rasgon lowered the price target on Qualcomm (NASDAQ: QCOM) to $200.00 (from $215.00) while maintaining an Outperform rating.

“Qualcomm has remained out of favor amid general distaste of smartphones, AAPL rolloff etc, and recent dynamics in the memory market have not helped things with the shares lagging materially in recent months.

For now smartphones have been OK, at least, but we understand the go-forward concerns.

At a minimum we do believe that QCOM may be more insulated (if not necessarily immune) given their over-indexing to the higher end of things.

And while understand the broader concerns though (AAPL roll-off, possible mis-modeling of the Exynos share step-down, etc) we still believe there is value to be had under the surface an objectively strong product portfolio and an adjacency story that looks increasing real (with an emerging AI story to boot) that should become more and more obvious as AAPL winds out of the numbers over time, with valuation (in our opinion) more than reflective with the stock at <13x P/FE, a ~44% discount to the S&P and a 56% discount to the SOX.

We get that the stock plays in out of favor areas, numbers might be too high etc. But we still think the story is worth a look as the narrative grows cleaner through the year.

We lower our PT to $200 on lower estimates, but maintain our Outperform rating.”

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