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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: LBstocks who wrote (57604)	12/29/1999 1:57:00 PM
From: ggamer	Read Replies (2) \| Respond to of 152472

cbs.marketwatch.com Clueless Investor Price targets: Reach for the sky By Cecily Fraser, CBS MarketWatch Last Update: 1:02 PM ET Dec 29, 1999 Personal Finance Analyst Forum NEW YORK (CBS.MW) -- In search of a sure thing on Wall Street, investors piled into shares of Qualcomm on Wednesday after analysts at PaineWebber set a lofty $1,000 price target on the high-flying stock. The stock advanced 114 to 617 on the news and hit an intraday high of 622. The telecommunications equipment maker's shares have climbed 2,332 percent this year, making it one of the most closely followed stocks on Wall Street. While the $1,000 benchmark boosted investor confidence in the Qualcomm's ability to continue its stratospheric climb, it also left clueless investors wondering how the analyst could justify such a far-out objective. A long-term investment PaineWebber analyst Walter Piecyk plugged the company's fundamentals, saying in a research note he believes Qualcomm represents "an appropriate way" to invest in the long-term growth trends of wireless and data communications. Piecyk started Qualcomm (QCOM: news, msgs) with a "buy" rating. The analyst said that by the end of the next decade, 85 percent of phones sold will use Code Division Multiple Access (CDMA) technology, up from 18 percent today. This would create a 45 percent compound annual growth rate for CDMA and a royalty stream of up to $20 billion for Qualcomm, Piecyk said. Qualcomm's CDMA technology is used in cellular phones and wireless communications. The company sells more than 90 percent of the Application Specific Integrated Chips (ASICs) used in CDMA phones and collects royalties for all CDMA phones. See Ratings Game. "Our 12-month price target of $1,000 implies 175 times and 55 times our 2001 profit and revenue estimates but is based on $800 for the present value of its royalty stream, $170 for 60 times its ASIC profits and $30 for other assets," Piecyk said. In the company's latest earnings report, the wireless giant reported fourth-quarter net income of $170 million, or 91 cents a share. Revenue totaled $1.1 billion. Aiming high PaineWebber's bullish move comes on the heels of another price objective increase made just last week. JP Morgan upped its target on Qualcomm to $570 from $460. The call is also reminiscent of an outlandish move made in mid-December last year by Internet guru Henry Blodget. Blodget, who at the time was an analyst for CIBC Oppenheimer, hiked his 12-month price target on Amazon.com's (AMZN: news, msgs) stock to $400 a share from a previous target of $150. In support of his objective, Blodget said Amazon.com was in the early stages of building a global electronic-retailing franchise that could generate $10 billion in revenue and earnings per share of $10 within five years. Bloget's stunning target was met Jan. 6. Clearly, investors take heed when analysts voice their expectations for a stock, hoping to reap the benefits of Wall Street's passion for aiming higher. Not everyone is making money. There are actually investors, believe it or not, who buy or sell a stock, commodity, piece of art or security at the wrong time. CBS MarketWatch readers, if you have a five-paragraph tale of clueless adventures, e-mail it to our newsroom. Cecily Fraser is a reporter for CBS MarketWatch.