- Goldman, which pulled Qualcomm (QCOM) from its Conviction Buy list on March 8 (tougher competition was cited), is re-adding the mobile chip/IP giant today, while maintaining an $80 PT.
- Analyst Simona Jankowski notes Qualcomm is only up 11% YTD (compared with a 24% gain for the S&P), and that its forward P/E ha fallen to 13.2 from 14.2.
- She thinks Qualcomm's multiple compression is over, and (with the company having just promised more disciplined spending) forecasts chip division margins will rise by 400+ bps over the next four quarters. That, in turn, is expected to help fuel an 850 bps increase in op. margin.
- Jankowski also expects Qualcomm, which is already planning to buy back $4B worth of shares in FY14 (ends Sep. '14), to detail a more structured capital allocation plan at its Nov. 20 analyst day.
- Shares +0.7% premarket.
Qualcomm added back to Goldman's Conviction Buy list
Nov 13 2013, 08:23 ET