Nomura Securities Maintains a 'Buy' on Broadcom (BRCM); Q4 Review - Valuation Still Compelling

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BRCM Hot Sheet

Rating Summary:
23 Buy, 2 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38

Nomura Securities maintains a 'Buy' on Broadcom (NASDAQ: BRCM) price target of $45.00.

Analyst, Romit Shah, said, "Q4 revenue of $1.82bn and EPS of $0.67 were above our estimate and consensus of $1.81bn and $0.64. Q1 guidance of $1.7-1.8bn (-4%) is slightly better than seasonal and within the range of our estimate and consensus. EPS of $0.55 is a couple pennies better than consensus, but below our $0.57. The March quarter outlook is slightly better than consensus, but the real focus should be on what’s coming over the next 12 months. We see a couple high volume product ramps (iPhone 5 (Nasdaq: AAPL), Nokia 3G (NYSE: NOK)), a new standard in WiFi (802.11ac) boosting connectivity share and margins, and a cyclical recovery in Networking and Infrastructure. And investors should not forget $0.10-$0.20 of EPS accretion from the NetLogic acquisition. We believe these drivers could lead to $2.50- 3.00 in GAAP earnings in 2013. Broadcom’s valuation is still compelling in our view, trading at 14x CY13E GAAP EPS and 1.9x EV/Sales versus a 2.6x for our coverage universe."

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

Shares of Broadcom closed at $34.35 yesterday, with a 52 week range of $27.59-$46.75.

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