Since finally overcoming its outstanding lawsuit with Apple (AAPL) in December, Qualcomm (QCOM) has put itself in a solid position to thrive in light of the 5G revolution. The mobile chip giant expects earnings will increase more than a whopping 50% in 2021 and at a rate of roughly 25% through 2026. Those figures may seem ambitious, but they are definitely attainable as the 5G chip market is expected to grow by a massive 88% over that same time-frame.Indeed, Rosenblatt analyst Kevin Cassidy, who is ranked in top 100 of more than 14,000 experts on TipRanks, is confident that the mainstream adoption of 5G is imminent and will be widespread, affirming that Qualcomm is strategically positioned to take full advantage of the trend for years to come.The 5-star analyst views 5G revolution as an essential driver for QCOM for several reasons, including its rapid adoption, extensive applications, and industry-breaking capabilities.Above all, Cassidy envisions 5G technology being the quintessential growth driver in tech sector for what could be more than a decade. Presently, carrier companies are integrating 5G into their cellular networks across the globe, and the analyst estimates that “Qualcomm’s dollar content per handset [will] increase 25% to 50%” relative to those operating with 4G. Even more promising, though, is the “technology’s ability to connect ‘things-to-things.’” The major differentiator between 5G and all previous networks is its ability to exchange data among all sorts of objects and devices, including cars, traffic lights, factories, and more.Cassidy is confident that the long-term implications of 5G will work heavily in Qualcomm’s favor. Even if the pandemic does bring more economic slowdown, more people and businesses will be relying on 5G technology to communicate from home to be optimally efficient. Widespread adoption of the technology is inevitable, and QCOM will be ready to capitalize.To this end, Cassidy rates QCOM an Overweight along with an annual price target of $105, which implies about 22% upside from current levels. (To watch Cassidy’s track record, click here)TipRanks is not quite as keen on QCOM, but nevertheless exhibits the stock as a Moderate Buy. Out of the 19 analysts offering ratings on Qualcomm, 10 say Buy, 6 suggest Hold, and 3 recommend Sell. With a 12-month average price target of $89.73, the stock suggests a modest upside of 4% (See QCOM stock-price forecast on TipRanks).To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * Acadia Files Nuplazid Label Expansion; Analyst Sees 'Significant' Potential * Jazz Pharma Scores Surprise Early Approval For Lung Cancer Treatment * Facebook’s WhatsApp Rolls Out Digital Payment Service In Brazil * United Airlines Secures $5 Billion Loan To Shore Up $17 Billion Liquidity Chest
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Top news and what to watch in the markets on Tuesday, June 16, 2020.
(Bloomberg) — Banks including Credit Suisse Group AG and Morgan Stanley face a $300 million shortfall on margin loans to the embattled founder of Luckin Coffee Inc., after they sold shares he had pledged as collateral for deeply depressed prices.The lenders, which also include Haitong International Securities Group and Goldman Sachs Group Inc., raised about $210 million from Luckin stock disposals over the past two months, people familiar with the matter said. Luckin Chairman Lu Zhengyao defaulted on $518 million of margin debt in early April, Goldman said in a statement at the time, after revelations of accounting fraud caused shares of the Chinese coffee chain to plunge.The stock sales represent the latest attempt by Lu’s creditors to limit losses from a scandal that has fueled calls in Washington for tougher scrutiny of financial ties between the U.S. and China. Luckin’s fall from grace blindsided some of the biggest names on Wall Street just as they were gearing up for a historic expansion into Asia’s largest economy.Spokespeople for the lenders declined to comment. Luckin didn’t immediately respond to multiple requests.Goldman, tapped by lenders to oversee the stake disposal, said in April that it would sell as many as 76.35 million of Luckin’s U.S.-listed shares. The firm has now liquidated the entire position, one of the people said, asking not to be identified discussing private information.A back of the envelope calculation suggests the shares were sold for $2.75 apiece on average. That compares with the closing price of $26.20 before the Luckin scandal emerged and the $3.18 average price since April 6, when Goldman announced plans to offload the stake.Credit Suisse and Morgan Stanley each put up about $97 million for the margin loans, while Haitong International lent about $134 million, one of the people said. Goldman and Barclays Plc lent $73 million and $78 million, respectively, while China International Capital Corp. contributed $39 million.It’s still unclear whether the banks will ultimately lose money. They’re also pursuing the assets of an investment company controlled by Lu’s family trust, Bloomberg News reported last month. The investment company has disputed that it’s in default and has requested an injunction in Hong Kong to prevent liquidation proceedings, according to a May 6 court filing.Lu became a billionaire after his fast-growing Starbucks rival went public in the U.S. last year. Much of his wealth has since been wiped out by the 85% plunge in Luckin’s stock since April, when the company disclosed that some of its employees may have fabricated billions of yuan in sales.Chinese regulators have obtained emails purporting to show Lu instructed financial fraud, business news outlet Caixin reported this month, citing unidentified people close to the agencies. Regulators found evidence of fraud at Luckin in their investigation, Caixin cited several people as saying.Lu has previously denied deceiving investors. “My personal style may have been too aggressive and led the companies to run too fast, which has triggered many problems,” he said in a statement last month. “But I never lied to investors with the idea of ‘selling concepts.’ I’m working hard to make the company bigger and better to create value for society.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.