Why Qualcomm, Inc. Might Pull Back a Bit
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Qualcomm, Inc. had a sluggish Thursday after Raymond James downgraded the mobile chipset giant from "Strong Buy" to "Outperform."
So what: Along with the downgrade, analyst Tavis McCourt reiterated his price target of $79, representing about 11% worth of upside to yesterday's close. While McCourt remains bullish about Qualcomm's fundamentals following its Analyst Day, he believes that management's long-term growth forecast could be a bit on the high side.
Now what: According to Raymond James, the stock's risk/reward trade-off still looks favorable. "Qualcomm committed to a long term capital return program, and new product announcements confirm the company's dominance of high end mobile chipsets," noted Raymond James, "and although we are slightly skeptical of Qualcomm's ability to grow 10%+ for five years (a long time) as it guided to, we do believe that high-single-digit EPS growth looks like a conservatively prudent estimate along with a 2%+ dividend yield." So while Qualcomm shares aren't exactly dirt cheap, I'd agree that they still offer solid long-term, risk-adjusted value.
Interested in the next tech revolution?
Then you'll need to learn about the radical technology shift some say forced the mighty Bill Gates into a premature retirement. Meanwhile, early in-the-know investors are already getting filthy rich off of it... by quietly investing in the three companies that control its fortune-making future. You've likely heard of one of them, but you've probably never heard of the other two... to find out what they are, click here to watch this shocking video presentation!
The article Why Qualcomm, Inc. Might Pull Back a Bit originally appeared on Fool.com.Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.