Qualcomm (NASDAQ:QCOM) — This company is a leader in developing products and services based on its advanced wireless broadband technology. On Feb. 1, Qualcomm reported fiscal Q1 earnings of $1.26, beating analysts’ consensus estimate of $1.13.
Since I last recommended the stock on March 6, the consensus estimate has been raised by $0.03 to $4.53 for fiscal year (FY) 2013, ending in September, versus $3.71 in FY 2012. Estimates were also raised for FY 2014, up $0.05 to $4.91. As a result, many analysts have raised their price targets, which now stand at a median of $76.50, although S&P increased their target to $84.
Early in March, the company announced a dividend increase of 40%, along with a new $5 billion stock buyback program to replace a previous $4 billion plan. Second-quarter earnings of $1.16 per share are expected to be reported after the close today.
Traders should look for a break through the 50-day moving average at $65.83 and a subsequent break above last March’s high of $68.87 to the $78-$80 area. Longer-term investors can expect much higher prices, possibly even a run to $100, since this company is on an earnings tear that could exceed analysts’ estimates in every quarter in fiscal 2013 and 2014.
Note the new buy signal from our proprietary indicator, the Collins-Bollinger-Reversal (CBR), which has correctly triggered three trading buy signals on this stock since July. Traders entering new positions should place a stop-loss order at $62, which should protect against a modest earnings miss.