Nomura Securities Upgrades Broadcom (BRCM) to Buy

Nomura Securities upgraded Broadcom (NASDAQ: BRCM) from Neutral to Buy with a price target of $50.00 (from $40.00).

"We've wanted to upgrade Broadcom since the company's analyst meeting in Dec, but have been waiting for a pullback and a catalyst," analyst Romit Shah commented. "We believe we got both last week."

The analyst added, "Broadcom remains very cheap, per our estimation, trading at 15x free cash flow (minus stock comp), versus a comp average of 18x. The discount reflects distrust in management after one bad acquisition and failed attempts in baseband. However, we believe that management deserves more credit. Almost every company botched baseband. And the company's analyst day meeting demonstrated a strong effort to right the ship, as evidenced by reduced stock option expense, higher capital returns and improved financial transparency."

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 $42.91 yesterday.

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