Nomura Securities Maintains a 'Buy' on Avago Technologies (AVGO); Expecting Solid Q1

February 21, 2012 10:08 AM EST
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Price: $197.55 +3.43%

Rating Summary:
    38 Buy, 2 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 17 | New: 10
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Nomura Securities maintains a 'Buy' on Avago Technologies (NASDAQ: AVGO) price target of $40.00.

Analyst, Romit Shah, said, "Avago will report FQ1 results after the market closes on Wednesday, February 22. Our estimates of $0.60 in FQ2 (Apr) and $2.76 in calendar 12 (Oct) are above consensus of $0.58 and $2.59, respectively. The Street’s estimate of 6% revenue growth this year under-estimates growth in wireless and a cyclical recovery in industrial in the back half, in our view. We expect Avago to report January sales at the high end (down 10-14%) and guide April sales up 5% QoQ. That’s about 3 points above normal seasonality. We believe Avago is undervalued at 11x CY13 versus Analog Devices (NYSE: ADI), Linear Tech (Nasdaq: LLTC), Maxim Integrated (Nasdaq: MXIM), and Texas Instruments (NYSE: TXN) at 14x. The stock also traded at a 35% premium to semis last year, but today trades at a 5% premium on EV/sales."

For an analyst ratings summary and ratings history on Avago Technologies click here. For more ratings news on Avago Technologies click here.

Shares of Avago Technologies closed at $35.24 yesterday.

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