Markets & Finance

Merrill Upgrades Qualcomm to 'Buy'


Merrill Lynch upgraded Qualcomm (QCOM) to buy from neutral.

Analyst Tal Liani says analysis shows that in the case of 20% WCDMA penetration in Western Europe and Japan over the next few years, Qualcomm's earnings per share could grow from the current $1.35 fiscal 2004 (Sept.) earnings per share estimate to $2.06. Additionally, he expects further third-generation deployment in 2004 in various European countries and Japan.

Liani believes investors should now take a longer view on Qualcomm. He says his $50 12-month target is based on a current p-e multiple of 30, with $2 in achievable earnings per share power in two to three years, discounted in today's value. When the WCDMA roll-out accelerates, Liani says the company's multiple could expand further.


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