Qualcomm Inc (QCOM)

[khemara_qc]

Qualcomm On Track For Long-Term Growth
06.02.05, 11:37 AM ET


http://www.forbes.com/markets/2005/06/02/0602automarketscan09.html?partner=yahootix&referrer=

Piper Jaffray reiterated an "outperform" rating on Qualcomm (nasdaq: QCOM - news - people ) and said valuation remains attractive for shares of the wireless-technology company. "We remain comfortable in our expectations for 3G sell-in and sell-through trends during the second half of 2005 and 2006 and overall strong longer-term growth for Qualcomm," said Piper Jaffray. "As a result, we believe Qualcomm's current valuation provides an attractive long-term opportunity." The research firm said accelerating mobile-data trends bodes well for long-term demand of 3G technologies as well as Qualcomm's high-end chipsets. Piper Jaffray maintained a $50 price target on Qualcomm shares. "We believe Qualcomm deserves to trade at 30 times our fiscal 2006 pro-forma estimate, adjusting for $5 per share in cash, which leads to our $50 price target," it said. "We believe this multiple is reasonable given improving visibility regarding 3G CDMA subscriber growth and Qualcomm's dominant patent portfolio. With the more than 1 billion GSM subscribers on a migration path to CDMA-based technologies over the next decade, we believe Qualcomm could post strong long-term earnings growth." Piper Jaffray also noted that South Korea's Pantech and Japan's Kyocera (nyse: KYO - news - people ) could be set to launch new CDMA handsets. Verizon Wireless, a joint venture of Verizon Communications (nyse: VZ - news - people ) and Vodafone (nyse: VOD - news - people ), could help EV-DO growth. "We believe Pantech could launch another EV-DO handset at Verizon through its partnership with UTStarcom (nasdaq: UTSI - news - people ), which we believe will help further stimulate EV-DO uptake at Verizon," said Piper Jaffray. "As Verizon launches EV-DO in new markets, we expect other OEMs [original equipment manufacturers], including Motorola (nyse: MOT - news - people ), to also launch EV-DO handsets during the second half of 2005."