Qualcomm (NASDAQ:QCOM) was in focus on Thursday as J.P. Morgan placed the semiconductor company on negative catalyst watch, citing a lack of “significant change” in the smartphone market.
Shares fell 0.8% in premarket trading.
“We are yet to see any significant change in the fundamentals for the smartphone market with the recovery expected to remain muted in 2024,” a team of analysts led by Samik Chatterjee wrote in an investor note. “Additionally, recent data relative to the smartphone market in China also raises concerns around limited underlying recovery, despite a robust outcome for 4Q23.”
J.P. Morgan has an Overweight rating and $170 price target on Qualcomm.
While the analysts expect Qualcomm’s fiscal second-quarter revenues to be “modestly” above consensus at $9.5B, guidance for the following quarter should be in-line with estimates, which could set shares up for disappointment with the stock up 20% year-to-date.
A consensus of analysts expect the company to earn $2.31 per share on $9.33B in revenue.
“The muted upside in the market drivers, despite the strong performance for the shares, will likely challenge the short-term share price reaction in our view,” the analysts wrote.
Separately on Thursday, investment firm Bernstein raised its price target on Qualcomm to $200 from $170.