Merrill Lynch Iterates A Buy Rating For Qualcomm

Analysts from Merrill Lynch reiterated a Buy rating for Qualcomm stocks while maintaining a bullish stance.

Qualcomm Inc. is one of the most popular companies in the chip-making industry. The company’s popularity spreads everywhere where its Snapdragon processor has become a hot cake and a sought after processor for smartphones and other devices. The company is doing fairly well and now has another buy rating by Merrill Lynch. Analysts at Merrill Lynch have now been reiterated a BUY rating for Qualcomm’s stock. The average price target for the company’s stock is $80. The reason behind the company’s stock rating is that its focus on region and key consumers. Apart from this, the analytical firm also indicated that the contribution of tech giants like Samsung Group and Apple Inc. has added positively to the semiconductor and license business of Qualcomm. As reported by Merrill Lynch, the department of QCOMs CDMA Technologies has grown to the point where big companies in the tech world like Samsung, Xiaomi and Samsung accumulatively have governed a profit of 6.8%. Apart from this, the analyst also believes that the few loopholes that the company has been dealing with give investors a good chance since they can make a lucrative investment. Moreover, they also believe that if investments are made at this point then there are good chances for growth recovery that will be possible through smart and tactful restructuring. Merrill Lynch believes that Qualcomm is relatively overexposed when it comes to Samsung and Apple. The semiconductor giant can expect a contribution of 23% and 15% respectively that is likely to accelerate further. This is in comparison to the company’s revenues for the fiscal year of 2015, which is paired with a 33% and 24% rise in terms of profits. Apart from this, the exposure is said to be contributed by the revenues of Qualcomm Technology Licensing (QTL) that will remain stable in the times to come. Apart from this, the analysts at Merrill Lynch have also brought down their estimates since the demand for China made smartphones has decreased. Qualcomm was expected to raise 22% of its revenues from China but now things do not seem much in favor unless the demand for smartphones increases. Qualcomm despite has been doing quite well with several big tech companies on board; it still needs to put in more effort to gain stability. As for now, it is a good time for investors to invest in Qualcomm stocks with good growth recovery in the times to come.