Qualcomm soars
Painewebber puts $1,000 target on the wireless company
By Susan Lerner, CBS MarketWatch
Last Update: 9:17 AM ET Dec 29, 1999
Analysts Ratings
Market Pulse
NEW YORK (CBS.MW) --Early on Wednesday, Walt Piecyk went where
few have gone in evaluating any stock.
The PaineWebber analyst initiated coverage of
Qualcomm (QCOM: news, msgs) with a "buy"
rating, but more importantly slapped a $1,000
12-month price target on the shares. Its stock soared
early Wednesday, tacking on 33 1/8 to 536 1/8 in
Instinet, after falling 10 3/8 on Tuesday.
Piecyk said he believes Qualcomm represents "an
appropriate way" to invest in the long-term growth
trends of wireless and data.
Piecyk said that by the end of the next decade, 85
percent of phones sold will use Code Division
Multiple Access (CDMA) technology, resulting in up
to a $20 billion royalty stream for Qualcomm. The
developer of CDMA wireless technology sells more
than 90 percent of the Application Specific
Integrated Chips (ASICs) used in CDMA phones
and collects royalties for all CDMA phones.
"Our 12-month price target of $1,000 implies 175x
and 55x our 2001 profit and revenue estimates but is
based on $800 for the present value of its royalty
stream, $170 for 60x its ASIC profits and $30 for
other assets," Piecyk said in his research note. |
