Following the close today, Qualcomm (QCOM) will take center stage and announce the December quarter’s (F1Q22) results. If for some reason you are about to bet against the chip giant delivering the goods, then J.P. Morgan’s Samik Chatterjee would advise you to think again.

Based on recent earnings reports from Mediatek – which evinced “strong momentum in 5G smartphone adoption and upside through content growth opportunities,” – and Apple’s blowout earnings which being Qualcomm’s largest customer bodes well for both QCT and QTL, the analyst believes the “setup is favorable.”

Overall, Chatterjee’s expectations are marginally above the Street’s; Chatterjee is calling for F1Q revenues of $10.6 billion, while consensus has $10.4 billion and the guide calls for $10-$10.8 billion. For EPS, Chatterjee has $3.03 vs. consensus at $3.00 and QCOM’s $2.90-$3.10 guide.

So, an optimistic tone from Chatterjee. That said, while many have dialed down expectations in recent times when providing an outlook, the analyst has an even more bullish take when considering the current March quarter (F2Q22).

Chatterjee forecasts a sequential drop of just 7%, compared to the seasonal drop of 12% historically for the smartphone market in general (and peer Skyworks). The 5-star analyst thinks the company will be able to buck the normal seasonal trend of revenue moderation by demonstrating the “benefits of its diversification relative to other smartphone chipset suppliers.” A mix of “supply chain easing, share gains with android customers, favorable pricing trends, as well as growth drivers from non-smartphone end-markets” will allow Qualcomm to generate above-seasonal and better-than-expected revenue in F2Q22.

In fact, Chatterjee highlights Qualcomm’s “inexpensive valuation” and sees the stock as a “top pick.” That designation comes with an Overweight (i.e., Buy) rating and $225 price target. The figure suggests shares have room for 27% growth in the year ahead. (To watch Chatterjee’s track record, click here)

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Not everyone on the Street is quite as bullish; the stock ekes out a Moderate Buy consensus rating, based on 12 Buys vs. 9 Holds. The forecast calls for 12-month gains of 12%, considering the average price target comes in at $198 and change. (See Qualcomm stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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