Wolfe Research: Apple's related business may bring negative factors, down the rating of Qualcomm (QCOM.US)

Wolfe Research downgraded Qualcomm (QCOM.US) on Monday for various reasons, including concerns about its Apple (AAPL.US) business. Caso downgraded the stock to "equal" from "outperform." Analyst Chris Caso said that there are now concerns that Apple's work on building in modems will have an impact. Caso said that while the stock is trading at 15 times earnings, which isn't expensive, any loss of revenue from Apple is a negative and doesn't fully meet analysts' expectations.

Apple and Qualcomm announced in September that they had extended their previous agreement to 2026. Qualcomm will provide Snapdragon 5G Modem RF Systems for Apple's smartphones.

Caso also said that the boost from the high-end Android market has already normalized, and any growth in its IoT business (which may be the focus of the analyst day in November) is "harder" to convince investors.

Still, analysts generally like Qualcomm (QCOM.US), with a "buy" rating from Wall Street.