On Friday, Mizuho Securities showed a vote of confidence in Qualcomm Inc . (NASDAQ:QCOM) by raising its price target on the stock to $240 from the previous $180 while reiterating a Buy rating. The firm's analyst maintained the June quarter revenue and EPS estimates at $9.21 billion and $2.25, in line with consensus.
The forecast for fiscal year 2024 ending in September remains at $38.4 billion in revenue and $9.95 in earnings per share, slightly above the consensus of $38.3 billion and $9.91 respectively.
Looking ahead, the analyst adjusted the projections for fiscal year 2025, increasing the revenue estimate from $42.3 billion to $42.9 billion and the EPS from $11.07 to $11.36, compared to the consensus of $42.3 billion in revenue and $11.34 in EPS.
The forecast for fiscal year 2026 was also revised, with revenue expectations moving up from $45.1 billion to $46.4 billion, and EPS from $12.18 to $12.57, against a consensus of $45.0 billion in revenue and $12.52 in EPS.
The new price target of $240 is based on 19.1 times the estimated earnings per share for fiscal year 2026, which represents a discount to the Semiconductor Index trading at 23 times price-to-earnings. The firm believes that Qualcomm remains well-positioned in the market due to several factors including continued strength in handset sales, an expanding automotive business projected to reach $4 billion in revenue by fiscal year 2026, and a robust pipeline worth $45 billion in auto design wins.
Additionally, Qualcomm is expected to benefit from the growth of Edge AI with the introduction of the Snapdragon 8 Gen 3 for handsets and Snapdragon Elite X for PCs. The financial outlook is further supported by Qualcomm's strong cash generation, with over $10 billion per year in free cash flow anticipated.
InvestingPro Insights
In light of Mizuho Securities' updated price target and outlook for Qualcomm Inc. (NASDAQ:QCOM), recent data from InvestingPro offers additional context for investors. Qualcomm's market capitalization stands at a robust $228.56 billion, reflecting its significant presence in the industry. The company's commitment to shareholder returns is evident with a notable dividend growth of 6.25% over the last twelve months as of Q1 2023, and it has impressively raised its dividend for 21 consecutive years. This track record of consistent dividend payments is a testament to Qualcomm's financial resilience and commitment to its shareholders.
Qualcomm's P/E ratio, currently at 27.39, is indicative of investor expectations for future earnings growth, especially considering that 21 analysts have revised their earnings upwards for the upcoming period. This optimism is mirrored in the company's stock performance, with a significant 1-month price total return of 23.99% and an even more impressive 1-year price total return of 84.7%, signaling strong investor confidence.
For those looking to delve deeper into Qualcomm's financials and performance metrics, InvestingPro offers additional insights and analysis. With a comprehensive range of metrics and expert tips, investors can make more informed decisions. Discover more InvestingPro Tips for Qualcomm by visiting https://www.investing.com/pro/QCOM and take advantage of the exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 15 more InvestingPro Tips available, providing a wealth of knowledge for those looking to invest smartly in Qualcomm.
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