Qualcomm Inc (QCOM)

[IceRich]

Qualcomm Shares Seen With 20%-30% Upside To Market - SG Cowen


http://www.forbes.com/markets/2005/07/21/qualcomm-earnings-wireless-0721markets15.html?partner=yahoo...

Qualcomm Shares Seen With 20%-30% Upside To Market
07.21.05, 3:26 PM ET

SG Cowen continues to view Qualcomm (nasdaq: QCOM - news - people ) as a "core holding" and suggested that investors should add to positions at current price levels.

SG Cowen said, "We continue to believe that the fundamentals are in place for a strong 2006, driving upside to estimates. While we have conservatively trimmed slightly our 2006 forecasts (based on the current trajectory) we remain above consensus."

Qualcomm reduced calendar 2005 handset unit sales to 203 million from 213 million, including reducing WCDMA units to 45 million from 50 million. "Based on our calculations, we believe that 2H:05 handset growth will be such that December and March quarter consensus estimates remain achievable, if not low," SG Cowen said.

The research firm said, "We still expect Nokia (nyse: NOK - news - people ) to have a Qualcomm-based EV-DO phone before year's end and possibly a sub-$50 CDMA handset; three phones into DoCoMo by the second quarter of 2006; and China to award 3G licenses sometime in early 2006."

SG Cowen said, "With growth and returns accelerating into 2006 and an enterprise value/free cash flow of 19 times, towards the lower end of its historical range, we view the shares as attractive and see 20% to 30% upside relative to the market over the next 12 months.