FBR Positive On Qualcomm (QCOM)

FBR Capital Markets has an Outperform rating and is raising its price target to $60 on shares of Qualcomm QCOM. In a note to clients, FBR writes, "Qualcomm reported upside results and guidance Wednesday as the firm benefits from smartphone and tablet mania, and returns to its historical traditions of solid revenue growth and conservative financial guidance. Qualcomm's chipset and royalty businesses performed better than expected with pricing upside that resulted in Qualcomm raising FY11 financial guidance. C4Q revenues of $3.35B (+13% QOQ, +25% YOY) were five points above the high end of guidance. Gross margins of 69.3% (+20 bps QOQ) were as expected, while operating margins of 42.3% (+500 bps QOQ) were better than expected. EPS of $0.82 beat our $0.72 due to better investment income ($0.07) and revenues ($0.05). For calendar 1Q, Qualcomm guided revenues to $3.45B–$3.75B (+3%–12% QOQ) and EPS to $0.77–$0.81 (excluding stock compensation), better than the Street's $3.12B and $0.68. Upside is largely driven by stronger MSM chipset units and prices, and stronger device units as smartphones make up more of the mix." FBR goes on to say, " We maintain our Outperform rating, raise our calendar 2011 pro forma EPS estimate from $2.85 to $3.20, our 2012 estimate from $3.05 to $3.30, and raise our price target from $55 to $60, a constant 18x target multiple (2011 including stock compensation), seemingly appropriate given Qualcomm's growth and margin profile."