Can Qualcomm Overcome The Challenge Of Elevated Inventory? 5 Analysts Deep Dive Into FQ3 Print, Outlook

Shares of Qualcomm Inc QCOM plunged in early trading on Thursday, after the company announced weak guidance.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Susquehanna On Qualcomm

Analyst Christopher Rolland maintained a Positive rating, while raising the price target from $140 to $155.

Qualcomm’s results and guidance were both “disappointing,” due to soft handset demand, macro headwinds, and channel inventory drain, Rolland said in a note. He added, however, that the bottom now appears to be “in the rearview.”

Although the recovery may be slow, “we still believe CEO [Cristiano] Amon is proving Qualcomm can move beyond a modem and cellular IP company to become a true broad-based semiconductor player, successfully diversifying into RF, Auto, IoT and beyond, with the tailwind of edge AI still in the very early innings,” the analyst wrote.

KeyBanc Capital Markets On Qualcomm

Analyst John Vinh reiterated an Overweight rating and price target of $145.

“Smartphone demand was negatively impacted by a slower recovery in China and weak emerging market trends, while developed markets are stable,” Vinh said.

“Additionally, QCOM plans for additional opex reductions in 1H24 and acknowledged Huawei/HiSilicon headwinds in 2H23,” he added.

Check out other analyst stock ratings.

Canaccord Genuity Capital Markets On Qualcomm

Analyst Michael Walkley reaffirmed a Buy rating and price target of $152.

Qualcomm’s quarterly results were “basically in-line,” given that global inventory is “slowly working its way through the channel,” Walkley wrote in a note.

“Given the challenging macro backdrop with soft smartphone trends and slowing IoT demand, we anticipate a multi-quarter inventory correction will continue to weigh on near-term Qualcomm results,” he further stated.

Oppenheimer On Qualcomm

Analyst Rick Schafer maintained a Perform rating on the stock.

Qualcomm’s results were “mixed,” with revenues marginally missing estimates and an earnings beat on cost controls, Schafer said.

“Handset weakness persists (~75% sales by our math) with mgmt seeing a more muted recovery than peers,” the analyst wrote. “Channel inventory lingers into year-end,” he added.

Raymond James On Qualcomm

Analyst Srini Pajjuri reiterated a Market Perform rating on the stock.

Management did not provide any update on the modem supply agreement with Apple Inc AAPL, which is set to expire in the back half of 2024, Pajjuri said.

“We struggle to find many secular catalysts barring an extension of supply agreement at Apple, which will likely be temporary,” he added.

QCOM Price Action: Shares of Qualcomm were down 9.8% to $116.53 at the time of publication Thursday.

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