NEW YORK (TheStreet) -- Qualcomm (QCOM) - Get Report stock is rising by 4.33% to $46.49 in early-afternoon trading on Tuesday, following a ratings upgrade to "outperform" from "market perform" at Bernstein.
The firm increased its price target to $55 from $50 on the stock.
Last week's analyst day event gave Bernstein analyst Stacy Rasgon "greater comfort" about the royalty rates of Qualcomm's licensing division, Barron's reports.
Additionally, shares have declined by about 35% during the past 12 months "to (finally) make the risk-reward biased sufficiently positively enough to take a stand on the stock," Rasgon wrote. Qualcomm is appealing "with uncertainty abounding in semis" since the stock has already declined so much.
Although the downside could be $40, this "requires further extreme assumptions, and FCF declining >5%/year into perpetuity; at this level the stock would have ~1/3 of the market cap in cash and close to a 5% dividend," Rasgon continued, Barron's notes.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Qualcomm's strengths such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations are countered by weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
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.