Are Qualcomm Shares Headed To $230? Why Jim Lebenthal Says It's 'Absolutely A Buy'

Qualcomm Inc QCOM is trading lower Thursday with the overall markets despite strong quarterly results and a flurry of price target hikes from analyst firms. 

What Happened: Qualcomm reported fiscal first-quarter revenue of $10.71 billion, beating the $10.42 billion estimate. The company earned $3.23 per share on an adjusted basis, which also exceeded estimates. 

Qualcomm issued fiscal second-quarter guidance above analyst estimates as well.

Related Link: Qualcomm: Q1 Earnings Insights

Lebenthal's Take: "First off, the earnings itself were fabulous," Cerity Partners' Jim Lebenthal said Thursday on CNBC's "Fast Money Halftime Report."

On the conference call, management was "strongly leaning into" exceeding the expectations they laid out during Qualcomm's analyst day in November, he said. 

With that said, Lebenthal is having trouble figuring out why the stock is trading lower. It might be getting dragged down with the rest of the market following Meta Platforms Inc's FB earnings miss or it may be because the stock surged higher ahead of its report, he suggested.

"I really don't know, but I can tell you it's a gift," Lebenthal emphasized before saying he expects Qualcomm to grow earnings by 20% to 25% in 2022.

The main overhang on Qualcomm's stock is its concentrated business with Apple Inc AAPL; however, Apple wasn't even mentioned on the conference call, according to Lebenthal. Instead, the company focused on accelerating Android revenues, growing around 60%, he added.

"The point being they are actively and successfully diversifying their business."

Qualcomm deserves a 20x earnings multiple based on its diversification and its growth rate, Lebenthal said: "I'm going to give you a six-month price target of $230 a share ... this is absolutely a buy."

He plans to continue to add to his Qualcomm position on weakness. 

QCOM Price Action: Qualcomm has traded as low as $122.16 and as high as $193.58 over a 52-week period.

The stock was down 3.84% at $180.97 late in Thursday's session. 

Photo: courtesy of Qualcomm.