By Sam Boughedda
Key Banc analyst John Vinh raised the firm's price target on Qualcomm (NASDAQ:QCOM) to $220 from $200, maintaining an Overweight rating.
In a note to investors, Vinh said that despite peaking concerns, they expect Qualcomm to be sole-sourced in Samsung's (OTC:SSNLF) flagship GS23 smartphone in 2023.
KeyBanc previously had concerns that Qualcomm's position at Samsung had peaked this year after it increased its market share position with Snapdragon in the Galaxy S22 smartphone to 75% from 40% in the Galaxy S21. However, they now expect QCOM's share position to increase further to 100% of the GS23 next year.
In addition, Vinh said they "still expect Apple (NASDAQ:AAPL) to use QCOM's modem in the mmW version of the iPhone 15 in 2023.
"Given mmW performance issues with AAPL's internal 5G modem that we previously reported (link), we believe Apple plans to use its internal 5G modem for its sub 6Ghz SKUs and will continue to use QCOM's modem in the mmW SKUs, which we expect to account for 60% of iPhone 15 volume," wrote the analyst.
"We expect this to drive meaningful upside to management guidance of having only 20% share of the iPhone 15. We're raising estimates to reflect higher share assumptions at both AAPL and Samsung. We expect incremental share at both AAPL and Samsung to add $3.03B/ $1.26 in rev/EPS to our CY23 ests. We increase our CY23 rev/EPS ests to $52.0B/$14.52 from $49.0B/$13.26 prior."