Mobile chipmaker Qualcomm, Inc. (
) on Thursday saw its rating cut by analysts at Standpoint
Research, who noted the stock is likely now fully valued.
The firm lowered its rating on QCOM from "Buy" to "Hold,"
commenting "QCOM has jumped $8 (25%) since July 1 and has
out-performed the S&P-500 by > 2000 bps since 7/1. The
shares are now trading at > 17X trailing earnings and 15.7X the
EPS consensus for 2011. Given the recent move on an absolute and
relative (to the S&P) basis, we are not comfortable leaving our
highest rating attached to this name in the near-term. QCOM has a
market cap of more than $60 bln - 17X trailing twelve months
earnings is fair value for this name given the current environment.
The recent good news is priced in at this point. After watching
QCOM break $37.90 to the downside yesterday, we are happy to exit
here at $39.90."
Qualcomm shares were mostly flat in premarket trading
The Bottom Line
We had removed shares of QCOM from our "recommended" list back on
Sept.25, 2008, when the stock traded at $46.54. The company has a
dividend yield of 1.92%, based on last night's closing stock price
of $39.60. The company has technical support in the $36 price area.
If the shares can continue to rebound, we see near-term overhead
resistance around the $42 price level. We would remain on the
sidelines for now.
Qualcomm, Inc. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.2 out of 5 stars.
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, as well as a detailed explanation of
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