Qualcomm Downgraded to “Hold” at Standpoint Research; Valuation Call (QCOM)

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Mobile chipmaker Qualcomm, Inc. ( QCOM ) 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 Thursday.

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. ( QCOM ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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