Qualcomm's New Price Target Looks to Bolster Markets

PaineWebber initiated coverage of the highflier with a price target of 1,000.
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Thin markets be damned --

PaineWebber

analyst Walter Piecyk initiated coverage of

Qualcomm

(QCOM) - Get Report

with a buy rating -- and a 1,000 price target.

Euphoria over the call sent Qualcomm flying in the premarket. It was lately up 77 1/16, or 15.3 %, to 580.

"That's known as Blodgetting a stock," said Dan Mathisson, head stock trader at

D.E. Shaw Securities

. "It's when you take a stock that's up over 500% and put a price target that's more than 100 points above where the stock is now. It's a good way for an analyst to make a name for himself."

Piecyk timed his call well -- in these days between Christmas and New Year, there's a bit of a news vacuum.

"If you want to attract a lot of attention, it's a good week, with everyone looking for stories," said Mathisson. "Now the whole world is talking about this guy's call."

"We expect Qualcomm to double the number of ASICs

application specific integrated circuits sold to 100 million in 2001 from 50 million in 1999," wrote Piecyk in the note that accompanied the call. "We expect it to make 73 million ASICs next year."

Yet Piecyk did underline the risks to his stance. "Any news or perception impacting our underlying assumption of strong wireless growth or CDMA as the best technology for the convergence of wireless and data would have a dramatic impact on our, and the market's, view of the valuation of Qualcomm, even if that news was incorrect," he wrote. "In short, this is a volatile stock."

Stocks in general look like they'll begin the day on a firm note.

At 9 a.m. EST, the

S&P 500

futures were up 1.3, putting them nearly 7 above fair value and indicating a positive open.

The

Nasdaq 100

futures, which were treading water before the Qualcomm call was made public, were up 31. It's nearly a forgone conclusion that the

Nasdaq Composite

will hit 4000 in early trading. Whether the Qualcomm move will have the momentum to carry it through the day is the real question.

"It will be interesting to see if Qualcomm can hold these gains -- and to see if the Nasdaq can hold on," said Mathisson.

The 30-year Treasury was up 3/32 to 95 15/32, putting the yield at 6.47%.

Frankfurt shares were chopping through the flat line. The

Xetra Dax

was lately off 6.87 to 6854.67.

Paris'

CAC

was up 21.88 to 5848.96.

London traders came back from their Christmas break in good spirits. The

FTSE

was up 37.8 to 6844.3. Investors were cheered by speculation that insurer

Royal & Sun Alliance

will get taken out by

Zurich Financial Services

.

Tokyo's

Nikkei

added 27.06 to close at 18,820.58. Again

Sony

(SNE) - Get Report

was the big story. With the euphoria over Monday's stock-split announcement, Sony shares again rose by the daily limit of 2,000 yen (about $19.50).

"I'm a bit surprised that we're recycling news here," said a trader at a U.S. firm. "But hey, I don't have a problem with the market ending on a high note. If stock splits get investors excited, then we're looking for a great start to next year."

Sony sparked a bit of stock-split mania in Japan, with traders trying to second-guess who will be next.

Kyocera

(KYO)

tacked on 2,000 yen, as did

TDK

(TDK)

.

Hong Kong's

Hang Seng

index slipped 267.47, or 1.6%, to 16,660.82.

Pacific Century Cyberworks

, Asia's largest Internet stock outside of Japan, succumbed to heavy profit-taking after nearly tripling over the past two weeks. Shares fell 2.4 points, or 12.3%, to 17.1. The spectacular rise and fall of Pacific Century led many Hong Kong traders to speculate if someone was manipulating prices. There are rumors that the

Stock Exchange of Hong Kong

may launch an investigation.

Wednesday's Wake-Up Watchlist

By Tara Murphy and Brian Louis

Staff Reporters

Those who thought things couldn't get any more interesting with super-stock

Qualcomm

(QCOM) - Get Report

, think again.

PaineWebber

analyst Walter Piecyk initiated coverage of Qualcomm, setting a 12-month price target of 1000 on the stock. The analyst started coverage with a buy rating, stating that "we believe it represents an appropriate way to invest in the long-term growth trends of wireless and data." Qualcomm is the developer of the wireless technology code division multiple access, or CDMA, and Piecyk wrote that he believes "by the end of the next decade, 85% of phones sold will use CDMA technology (up from 18% today)."

Mergers, acquisitions and joint ventures

News Corp.'s

(NWS) - Get Report

Fox

division and

Time Warner's

(TWX)

cable unit entered a new long-term agreement, which calls for Fox stations' programming to be carried by

Time Warner Cable

, according to a report in

The Wall Street Journal

.

Niagara Bancorp

(NBCP)

is buying

CNY Financial

(CNYF)

for $87.9 million.

Earnings/revenue reports and previews

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.

)

Charles Schwab

(SCH)

expects to post fourth-quarter net income of 19 cents to 20 cents a share, which would put it ahead of the 13-analyst estimate of 17 cents and above the year-ago 12 cents. Schwab also expects full-year earnings to come in between 69 cents and 70 cents a share, which would put it ahead of the 13-analyst estimate of 67 cents and the year-ago 42 cents.

Analyst actions

Warburg Dillon Read

upped its fourth-quarter earnings estimates on

Calpine

(CPN)

to 41 cents from 36 cents a share.

Merrill Lynch

analyst Jeffrey Kauffman cut his intermediate-term rating on shares of

Eagle USA Airfreight

(EUSA) - Get Report

to neutral from accumulate.

Credit Suisse First Boston

started coverage of

Fifth Third Bancorp

(FITB) - Get Report

with a hold rating.

Miscellany

AT&T

(T) - Get Report

and

Covad Communications

(COVD)

have asked a

U.S. District Court of Appeals

in the District of Columbia to throw out a

Federal Communications Commission

decision, which enables

Bell Atlantic

(BEL)

to provide long-distance service in New York. AT&T and Covad are trying to push back Bell Atlantic's debut as a long-distance carrier in New York until their dispute is resolved.

According to the

1996 Telecommunications Act

, Bell Atlantic cannot be a long-distance voice and data-service provider for any of the 13 states in which it offers local service until it allows competitors into the local networks. The FCC gave its approval to Bell Atlantic, saying it provided rivals with equal access into 14 key areas of the local network in New York. AT&T and Covad claim that Bell Atlantic has not offered them an entrance into areas of the network they wanted to lease to compete in the local market.

Ireland's

Elan

(ELN)

submitted a new drug application to the

Food and Drug Administration

for

ziconotide

, a potential treatment for intractable pain.

Wall Street analysts who write research reports criticizing companies have run the risk of being derided by institutional investor clients, blocked from company conference calls and even fired, but now libel suits from these companies are posing a new problem for analysts, the Heard on the Street column in

The Wall Street Journal

said. The column pointed to a defamation suit filed by

Sunrise Technologies International

(SNRS)

against both

Sturza's Institutional Research

and

Avalon Research Group

, two firms that issued separate reports on Sunrise this summer questioning the profit potential of the company. For more on Sunrise, check out

TheStreet.com's

coverage of

the

company. Also

TSC's

Herb Greenberg

has

written

extensively

on

Sunrise.

Kaya Laterman contributed to this report.