Qualcomm (QCOM) Stock Slumps on Ratings Downgrade
NEW YORK (TheStreet) -- Shares of Qualcomm (QCOM) - Get Report are sliding 0.73% to $53.18 in late-morning trading on Friday after Evercore cut its rating on the stock to "hold" from "buy."
The firm trimmed its price target to $55 from $60 on shares of the smartphone chipmaker.
Evercore believes that Brexit will weigh on the revenues of semiconductor companies, Bloomberg reports.
"We do not envision a global recession, though the turmoil in the EU could weigh on worldwide nominal GDP thereby slightly negatively impacting global Semiconductor revenues," the firm wrote in a note. "With the E.U. contributing 20% of worldwide GDP, there is clear cause for concern - particularly in manufacturing segments (i.e. industrial, auto)."
For Qualcomm in particular, Evercore warns that the company hasn't made a "decisive pivot" towards growth through M&A or value by cost-cutting, Bloomberg adds. The firm therefore sees "few catalysts to warrant [a] material move higher."
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Qualcomm's strengths such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: QCOM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.