Broadcom (BRCM) Price Target Lifted to $54 at Susquehanna Post Q1

Susquehanna analyst Chris Caso reiterated a Positive rating and lifted his price target on Broadcom (NASDAQ: BRCM) to $54.00 (from $52.00) following results.

Caso commented, "BRCM put up another solid quarter which we think continues to demonstrate both stability in the business and benefits to shareholders from the company’s revised operating model. Revenue came in near the high end of expectations, guidance was slightly ahead for June, and operating margins beat expectations. BRCM also guided opex lower in 2Q, is buying back stock, and sounds significantly more optimistic with regard to their connectivity business (a main area of investor revenue concern). Our thesis has been that the revised operating model puts BRCM on a path to $3.50 in earnings power (including stock comp), requiring only modest revenue growth. If the company remains on that path, we think the discounted multiple is unsustainable, and every quarter that they execute on the revised strategy puts them a quarter closer to achieving a peer multiple."

The firm's 2Q15 estimates move to $2.1/$0.70 (w/SBC), up from $2.09 bln/$0.67 (w/SBC). C15 estimates move to $8.56 bln/$2.84 (w/SBC), from $8.48 bln/$2.82 (w/SBC) previously. C16 estimates move to $9.08/$3.23 (w/SBC), up from $9.05 bln/$3.17 (w/SBC).

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 $43.98 yesterday.

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