Citi Research analyst Christopher Danely described shares of Qualcomm Inc. QCOM,
neutral from Thursday’s purchase, following what it called a “mixed” earnings report. While Qualcomm exceeded Danely’s expectations with its first-quarter fiscal revenue and earnings per share, overall margins increased and came in below its estimates. “We updated QCOM last year based on an upside driven by share benefits and a 5G update cycle,” Danely wrote. “We believe the upside is over and we expect more downside positions as the bottom margins.” He said Qualcomm’s margins came under pressure through the 4G wave as the update cycle “matured,” a move he plans to make again with the 5G update cycle. Danely lowered its price target on Qualcomm stock to $ 165 from $ 194. Shares are up 8% in Thursday morning trading. They have risen 17% over the last three months as the S&P 500 SPX,
increased 12%.