Qualcomm Inc (QCOM)

[khemara_qc]

Qualcomm Shares May Outperform Market By 20%-30%
Maya Roney, 09.28.05, 10:42 AM ET

http://www.forbes.com/markets/equities/2005/09/28/qualcomm-earnings-wireless-0928markets04.html

S.G. Cowen raised earnings estimates on Qualcomm (nasdaq: QCOM - news - people ), predicting that the stock will outperform the market by 20% to 30% over the next 12 months due to increasing competition among handset carriers.

"We believe that increasing competition among the carriers will lead to higher subsidies this holiday season and several major carriers have started to prepare for this eventuality," said S.G. Cowen.

By the end of 2005, the firm expects to see a larger variety of 3G handsets and the first $200 WCDMA [wideband code division multiple access] phones. In early 2006, it believes there could be a number of catalysts that drive Qualcomm shares higher, including DoCoMo starting to sell WCDMA handsets containing Qualcomm silicon, Nokia's (nyse: NOK - news - people ) introduction of a sub-$50 CDMA handset for the emerging markets, and China's restructuring of its carriers and granting of 3G licenses.

S.G. Cowen raised its fiscal 2005 estimate on Qualcomm to earnings of $1.16 per share on revenue of $5.655 billion, up from earnings of $1.15 per share on revenue of $5.601 billion. The research firm maintained the fiscal 2006 earnings per share estimate of $1.56 but raised its revenue estimate for that year to $7.074 billion from $7.054 billion.

"We believe that Qualcomm should be a core holding as it is one of the highest quality large-cap technology companies and is poised to grow substantially over the next three to five years as a result of significant growth in the WCDMA market," said the firm.