Kaufman Bros. Cuts Price Target on Broadcom (BRCM), Management Sees Slowing All Around

Kaufman Bros. is reaffirming its Buy rating on shares of Broadcom (NASDAQ: BRCM), but is reducing its price target from $46 to $42 following industry wide slowdown.

The company released its Q3 results ahead of expectations with $1.96 billion in sales and EPS of $0.82. The firm notes that 9 percent growth in revenue was largely due to mobile and wireless sales.

Management offered fourth quarter guidance below expectations with revenue expected to be $1.7-$1.8 billion. An analyst at Kaufman comments, "In regards to Q4 revenue color, BRCM sees all of its businesses down Q/Q expect for its combo chips due to continued product ramps in mobile and wireless applications. In line with the lower guidance, we are cutting our estimates."

The firm is cutting its Q4 revenue and EPS estimates from $2.06 billion and $0.83 to $1.7 billion and $0.63. For fiscal 2011 and 2012, Kaufman is lowering its EPS estimates from $3.01 and $3.21 to $2.84 and $2.77. Revenue expectations for the two years were cut from $7.62 billion and $8.49 billion to $7.35 billion and $7.89 billion.

For more ratings news on Broadcom click here and for the rating history of Broadcom click here.

Shares of Broadcom closed at $35.80 yesterday.

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