Qualcomm Inc.’s much-battered stock received a vote of confidence last week as Lehman Brothers released an equity research report reiterating its “Buy” rating of the company’s stock, which has seen its value fall from a 52-week high of $200 per share earlier this year to the mid-$70 range it has been trading at recently.
The report noted that Qualcomm’s 1x CDMA technology was being considered by TDMA and iDEN operators as a future migration path to third-generation services.
“We believe growing evidence that some carriers currently using TDMA and iDEN technology may be considering upgrading to Qualcomm’s 1x CDMA technology as they migrate to data enabled networks may be viewed as a major strategic positive for [Qualcomm]. We reiterate our Buy rating,” the report said.
Lehman Brothers noted that Brazilian operator BellSouth International, a subsidiary of U.S. TDMA operator Cingular, was considering migrating to 1x technology in order to provide wireless data services. In addition, the report indicated that U.S. iDEN operator Nextel Communications Inc. also was considering using 1x technology due to continued skepticism about EDGE technology’s delivery time frame.
“While we do not expect major decisions until early [next year], our checks indicate [Qualcomm] is in discussions with all major TDMA carriers regarding 1x CDMA,” noted the report.
Lehman Brothers also reiterated its previous target price of $120 per share for Qualcomm’s stock. Qualcomm’s shares were up $2.95 per share in late Friday trading at $75.64 per share.
