AmTech Cuts Estimates on Qualcomm (QCOM) Ahead of Earnings; Reiterates Buy

American Technology Research lowered its estimates on Qualcomm (Nasdaq: QCOM) ahead of the company's Q4 earnings results, which are scheduled to be out in just a few hours. Despite a weaker outlook, the firm reiterates its Buy rating and $55 price target on shares of Qualcomm. The firm calls Qualcomm "a solid secular grower interrupted by the macro slow-down."

The firm sees Qualcomm reporting in-line Q4 earnings, but believes an inventory drag will likely result in March chips being down sharply from the December quarter. AmTech lowers its chip shipment estimate for March from 79 million to 65-70 million and notes that "every 4mm chip corresponds to ~$0.01 in EPS."

Given the weaker chip forecasts, AmTech cut its FY09 EPS estimate from $2.50 to $2.35, which compares to the Street estimate of $2.59.

Interestingly, AmTech sees "strong support in the low $30's..." With the stock trading around $33.51 (down 4.7%) today, the firm's price target represents potential price appreciation of 64% from current levels.

QUALCOMM Incorporated designs, manufactures, and markets digital wireless telecommunications products and services based on its CDMA technology and other technologies.

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