Citi Research analyst Christopher Danely downgraded Qualcomm Inc. QCOM,
to neutral from buy on Thursday, following what he called a “mixed” earnings report. While Qualcomm exceeded Danely’s expectations with its first-quarter tax revenue and earnings per share, gross margins fell and fell below its estimates. “We updated QCOM last year based on growth driven by stock gains and the 5G upgrade cycle,” Danely wrote. “We believe that the rise has ended and we expect several cases of disadvantages, such as lower margins. He argued that Qualcomm’s margins were under pressure during the 4G wave as the refresh cycle “matured”, a trend it is expected to repeat with the 5G refresh cycle. Danely lowered its Qualcomm share price target to $ 165 from $ 194. Shares are down 8% on Thursday morning trading. They have risen 17% in the last three months as the S&P 500 SPX,
increased by 12%.