Broadcom Ltd. (AVGO): Wired Could Outperform Flattish Expectations - RBC

September 26, 2016 7:59 AM EDT
Get Alerts AVGO Hot Sheet
Price: $172.92 -0.28%

Rating Summary:
    38 Buy, 2 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
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RBC Capital analyst, Amit Daryanani, reiterated his Outperform rating on shares of Broadcom Limited (NASDAQ: AVGO) and believes that the Wired Infrastructure segment could grow despite expectations for flattish performance.

Fundamentally, the analyst thinks:
1) Wired (~50% of sales) should sustain low-to-mid single digit growth in FY17 and beyond
2) modest underperformance (flat vs. modest growth expectations) LQ reflected STB product/mix issues that should get rectified
3) Data center revenues (~20% of Wired) saw Y/Y growth.

Overall, the analyst sees AVGO benefiting from a) dominant position within enterprise/CSP with leading Ethernet solutions (Tomahawk, Jericho, etc.), and b) Broadband: BRCM has leading presence & 2nd largest competitor (STM) exited the market, creating a $200M+ opportunity over the next 2-3 years.

No change to the price target of $190.

For an analyst ratings summary and ratings history on Broadcom Limited click here. For more ratings news on Broadcom Limited click here.

Shares of Broadcom Limited closed at $166.65 yesterday.

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