Sales to Apple (AAPL - Get Report) are back in the mix for Qualcomm (QCOM - Get Report) , but there's a lot more to the story for the chipmaker going forward, according to Wall Street analysts. 

While the waters look slightly choppy ahead for the chipmaker as the handset end market is still weak, some analysts are raising their estimates on the stock as 5G adoption could see earnings through on a longer-term basis. 

Qualcomm shares fell more than 4% after the company reported earnings after the close on Wednesday, but they were trading up 0.79% to $87.05 in early trading on Thursday. 

In its report, Qualcomm guided down its current fiscal third quarter revenue forecast to a range between $4.7 billion to $5.5 billion, below analysts' forecast of $5.3 billion, as handset demand remains weak, an issue several chipmakers are dealing with. Qualcomm did say it expects to book a one-time benefit of $4.5 billion to $4.7 billion for the current quarter coming out of its settlement with Apple over royalty payments; that payment is not included in its revenue forecast, however. 

Here's what analysts were saying about the latest report and outlook:

JPMorgan, Overweight, PT Raised From $88 to $96

"Near-Term Earnings Challenges from Smartphone Industry Weakness Unlikely to Materially Change 5G Bull Case," analyst Samik Chatterjee said in a note out Thursday morning. For the near-term, "the softer than expected end-market conditions are unlikely to impact the positive investor sentiment relative to Qualcomm's leadership in the imminent transition to 5G for the smartphone market," he added. He lowered his 2019 EPS earnings per share estimate to $3.86 from $4.56, and reduced 2020 EPS estimates to $5.95 from $6.90. 

However, Chatterjee also raised his price target on Qualcomm due to "a premium valuation associated with 5G leadership," with his new 2021 EPS multiple going from 12 to 16. 

Alliance Bernstein, Market-Perform, PT Raised to $85

"While our new model incorporates the settlement, given the current market situation our near-term EPS estimates barely move, though our 2021 estimate goes up substantially," wrote analyst Stacy Rasgon. "Hopes of 5G upside" makes "material upside likely a 2021 story." 

Morgan Stanley, Overweight, PT $95

"Owning QCOM should be worth the noise," wrote analyst James Faucette. "A US/China trade agreement could help get Huawei to start paying full royalties (which we estimate could push our FY20 EPS estimate well above $7, ceteris paribus), while the reliability of current cash flows gives the company a lot more options (incremental capital returns, M&A, organic investment), than most other semiconductor companies." 

Cowen, Outperform, PT Raised From $91 to $100

"We see a meaningful earnings inflection in C2020 on: 1) regained Apple chipset sales; 2) 5G taking a material portion of a stabilized smartphone market; and 3) Huawei settlement," wrote analyst Matthew Ramsay. "Long-term thesis intact of the leading 5G pure-play."

Oppenheimer, Perform, No PT Disclosed 

"Management again lowered outlook for 2019 global handset by 50M to 1.85B units, a number we find ambitious," wrote analyst Rick Schafer. "Management stated Apple in the model drives incremental $2.00 EPS in FY21. We believe settlement likely centers on Apple's desire for a 5G iPhone in 2020." 

"We expect QCOM to supply the modem in the coming 5G iPhone, potentially next year," Schafer said. Still, "We remain sidelined." 

 

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