Qualcomm (QCOM) shares are modestly higher today after American Technology Research analyst Mark McKechnie upped his rating on the stock to Buy from Neutral. He set a $52 price target on the stock. He says the company is “an excellent play on the global ramp of 3G.”
He gave four reasons for the upgrade:
- Management has indicated that March quarter is tracking in-line.
- Sees settlement of dispute with Nokia (NOK) in 3-18 months; expects Nokia to pay royalty of 2% or higher.
- Earnings power in 2009/2010 of $2.60 a share.
- Stock is cheap, at just 15x earnings power estimate above.
McKechnie sees the market for 3G handsets growing from 180 million last year to 280 million this year and 350 million next year.
QCOM today is up 38 cents, or 1%, at $39.80.