Citi Research analyst Christopher Danely downgraded shares of Qualcomm Inc. QCOM,
to buy neutral on Thursday, after what he called a “mixed” earnings report. Although Qualcomm exceeded Danely’s expectations with its first-quarter tax revenue and earnings per share, gross margins slowed and fell short of its estimates. “Last year we upgraded QCOM based on a rise driven by stock gains and the 5G upgrade cycle,” Danely wrote. “We believe the increase is over and we expect more cases of disadvantage, such as lower margins.” He argued that Qualcomm’s margins were under pressure during the 4G wave as the upgrade cycle “matured,” a trend he hopes to repeat with the 5G upgrade cycle. Danely lowered its Qualcomm stock price target to $ 194 to $ 165. The shares have an 8% discount on trading on Thursday. They have risen 17% in the last three months like the S&P 500 SPX,
has risen by 12%.