Qualcomm Strengthens Ahead of Earnings Report

Qualcomm, D1

Qualcomm is scheduled to release its latest quarterly earnings report on Thursday, February 02, 2023 after the market close.  Zacks Consensus Estimate for revenue was pegged at $9,700 million, representing a 9.3% decrease from the year-ago quarter’s reported figure. Adjusted earnings per share were pegged at $2.35, indicating a contraction from the $3.23 posted in the prior-year quarter. Zacks ranks Qualcomm #4 (Sell).

Investors expect the company to declare that they have not only topped their forecasts, but also that they anticipate growth for the next quarter. On the last report the company EPS was $3.13 inline with expectations , which was followed by a 7.66% drop in share price the next day. As one of the world’s leading providers of digital wireless telecommunication products and services, the company is expected to record lower revenue on an annualized basis, due to lower demand for smartphone chips amid global uncertainty.

The high supply and low demand situation in the post-pandemic period forced vendors to drastically reduce deliveries. The company has downgraded its smartphone shipment prospects from single-digit declines to low double-digit percentage declines, signaling a downward trend in the handset market. In addition, escalating geopolitical tensions have fueled global instability and added to macroeconomic challenges. These factors will probably hurt the company’s first quarter earnings.

#Qualcomm shares are trading at $138.46 as of February 1. Over the last 52 week period, the stock is down more than 25%. Given these returns are generally negative, long-term shareholders are likely to be unhappy with these earnings releases.

Technical Review

The 101.90 rebound in November managed to extend the rally, after breaking the key resistance 128.15 last week. The current technical indicators are validating the gains, with the price moving above its 200-day exponential average, slightly above the 38.2% FR level. RSI is in the overbought level and MACD is in the positive zone. A continuation move on the upside could test the 147.24 resistance at 50.0% FR and higher July 2022 peak at 156.60. While on the downside, the resistance level at 128.15 which is now a support could  prevent a decline.

Evercore ISI set a price target of $120.00 for Qualcomm. Wells Fargo downgraded it from “equal weight” to “low weight” and assigned a price target of $105.00 to the company.

Barclays upgraded from an “equal weight” to an “overweight” rating and raised their target price for the stock from $120.00 to $150.00, and Canaccord Genuity Group lowered their price target on QUALCOMM from $225.00 to $165.00 and assigned a “Buy” rating to the company.- Source: Marketbeat


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Ady Phangestu

Market Analyst – HF Educational Office – Indonesia

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