With its shares plummeting more almost 34% in 2015, including 25% declines over the past six months, Qualcomm (QCOM) - Get Report has been one of the worst performers not only in the S&P 500 (SPX) index, but also when compared to its peers in the iShares PHLX Semiconductor ETF (SOXX) - Get Report . Still, with its combination of growth potential and solid 4.00% dividend yield -- twice the S&P 500 index -- you would be hard-pressed to find a chip stock that offers the appeal of Qualcomm, according to analysts at Merrill Lynch.

With a 12-month price target of $75, suggesting 56% gains from current levels of around $49, Merrill Lynch has selected Qualcomm as one of its favorite picks for 2016. And with a consensus 12-month price target of $60, it would seem Qualcomm -- despite its challenges -- remains a Wall Street favorite.

Owing to declines in the wireless chip business, not to mention being left out of Samsung's (SSNLF) Galaxy S6 phones, the San Diego-based chip giant has had a tough year in 2015. The company is feeling pressure from activist investor Jana Partners, its largest shareholder, which wants Qualcomm to spin off its chip business.

But according to Merrill Lynch, those headwinds are now behind Qualcomm. Merrill Lynch analysts believe the wireless chip giant, which has recurring licensing revenue and a large global footprint, is poised to rebound in 2016. Better still, Qualcomm wouldn't need extraordinary results in the next few quarters to please analysts, given that it is approaching periods of easier comparisons.

For starters, with QCOM stock trading near 52-week lows, the stock is priced at just 12 times fiscal 2016 earnings-per-share estimates of $4.17. And those estimates have climbed by 2 cents just in the past seven days. During that span, consensus estimates for fiscal year 2017 have also risen from $4.91 a share to $4.93. This new target now implies 18% earnings growth, compared to a 10% projected earnings decline for 2016.

So, is the worst now behind Qualcomm? Thanks to its aggressive cost cutting and having added two directors to its board last summer at the request of Jana, it appears so. Plus, with emerging markets like China and India (among others) still installing Qualcomm's 3G mobile technologies like CDMA (Code Division Multiple Access), Qualcomm's royalty revenue should continue to grow. Merrill Lynch analysts might have correctly called the bottom on QCOM shares.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.