Analysts at Bernstein slashed their rating on Qualcomm stock from Outperform to Market Perform based on recent valuation
Qualcomm, Inc. (NASDAQ:QCOM) stock slipped a little over 1.5% in today’s pre-market trading session, after analysts at Bernstein slashed its rating on the fabless semiconductor company from Outperform to Market Perform based on valuation. The chipmaker faced difficulty in finding its form at the start of fiscal year 2016 as its share price took a turn for the worst, carving its 52-week low of $42.24 on February 10.
However, shares of the semiconductor juggernaut managed to make a remarkable recovery from its record low levels and has since then, jumped more than 20%. The research firm downgraded Qualcomm stock as it believes that the company’s September estimates are too high, based on the unrealistic expectations from its licensing business. Analysts at Bernstein have maintained their $55 twelve-month price target on the stock, citing long term structural issues around the company.
Qualcomm has also faced increasing competitive pressures from its close rival Intel Corporation, as the company failed to retain its 100% share in the upcoming next-generation Apple iPhone 7. According to recent reports, Intel has managed to secure at least 30% share in the upcoming smartphone for its state-of-the art modem chips. However, several sources suggest that iPhones launched in the Chinese market will feature Qualcomm chips.
Earlier this month, analysts at BlueFin Research launched bullish comments about Qualcomm, citing significant share gain in GoPro Inc’s (NASDAQ:GPRO) low-end product offering. The research firm expects GoPro’s primary supplier of imaging chips, Ambarella to lose significant share in the adventure camera maker.
Additionally, the company has filed a lawsuit against Chinese Meizu for breaching its previously acquired patent which includes a wide range of features, tools and technologies used in the smartphones. According to recent developments, the fabless chipmaker has registered its complaint at Intellectual Property Courts in Shanghai and Beijing. Qualcomm stock has now surged a little over 4.5% since the start of calendar year 2016.