Qualcomm (QCOM) - Get QUALCOMM Incorporated Report was falling 2.8% to $134.30 on Monday after analysts at Susquehanna downgraded shares of the chipmaker in a bearish note on the semiconductor sector.
Qualcomm was cut to neutral from positive and its price target was also reduced to $155 a share from $175.
"Industry lead-times and valuation multiples have expanded to levels well beyond their historical averages, adding potential risk to this already volatile sector," Susquehanna analyst Christopher Rolland said.
The firm also said that shortages in the semiconductor industry could lead customers to accumulate inventory or double order, which could lead to overshipments that do not reflect true demand.
Susquehanna also downgraded Lattice Semiconductor (LSCC) - Get Lattice Semiconductor Corporation Report and Knowles Corp. (KN) - Get Knowles Corporation Report to neutral from positive in the same note.
The price target for Lattice Semiconductor was held at $56 a share. Knowles' price target was reduced to $22 from $24 per share.
Lattice dropped 5% to $55 a share on Monday. Knowles shares were falling 2.6% to $20.79.
Last week, Qualcomm was downgraded to in-line from outperform by analysts at Evercore ISI who also lowered theit price target to $150 a share from $195.
“While Qualcomm has had a good run, up 146% since before the Apple settlement and 59% since our addition to Top Picks in June 2020, we now believe the lion’s share of the 5G smartphone upcycle is priced into shares,” Evercore analyst C.J. Muse wrote in a commentary.
“Looking ahead, we point to a likely worsening competitive environment (MTEK primarily, but also Exynos and internal), AAPL sentiment turning from 5G design win to potential insourcing, slowing mmWave penetration, and likely rising foundry pricing that suggests risk/reward today is much more balanced.”