Qualcomm Shares Slide After Q2 Print, 4 Analysts Express Concern Around Outlook

Shares of Qualcomm Inc QCOM plummeted in early trading on Thursday, after the company reported mixed results for its fiscal second quarter and issued weak guidance. Here are some key analyst takeaways from the earnings call.

• Oppenheimer analyst Rick Schafer reiterated a Perform rating on the stock.
• Rosenblatt analyst Kevin Cassidy reaffirmed a Buy rating, while reducing the price target from $170 to $145.
• KeyBanc Capital Markets analyst John Vinh maintained an Overweight rating, while reducing the price target from $160 to $145.
• Raymond James analyst Srini Pajjuri reiterated a Market Perform rating on the stock.

Check out other analyst stock ratings.

Oppenheimer

Qualcomm reported its quarterly sales and earnings marginally higher than the consensus estimates but issued a weak outlook for its fiscal third quarter led by handset weakness, Schafer said in a note.

“Mgmt confidence in C2H China rebound is gone, with any improvement representing upside,” the analyst wrote. “We see China smartphone unit shipments flattish this year at ~300M."

Rosenblatt Securities

“Qualcomm delivered a roughly in-line quarter, but June quarter guidance includes more inventory adjustments,” Cassidy wrote in a note.

“Revenue from Android-based handsets is expected to be flat q/q, shipments of modems for iPhone are expected to be down,” the analyst further stated. “This likely extends into the September quarter."

KeyBanc

Qualcomm’s outlook was impacted by deteriorating demand for smartphones, with continued weakness in China, “resulting in expectations for the normalization of channel inventories being pushed out to F4Q,” Vinh said in a note.

Apple Inc’s AAPL pull-ins of modem orders and gross margin contraction due to more competitive pricing and higher foundry costs also exerted pressure on the guidance, the analyst stated.

Raymond James

“QCOM reported largely in-line results but its Jun-23Q outlook fell short of expectations due to weak smartphone demand and a 5G modem inventory correction (at Apple),” Pajjuri wrote in a note.

“Management expects inventory draw down to persist for another quarter and is guiding for below seasonal growth in Sep-23Q,” the analyst said. “The chipset margin outlook was also weaker due to a combination of higher foundry costs and limited pricing leverage."

QCOM Price Action: Shares of Qualcomm had declined by 6.67% to $105.30 at the time of publishing Thursday.