Oppenheimer Remains Bullish After a Sit Down with Avago Tech (AVGO) Management

Oppenheimer maintains an Outperform rating and $155.00 price target on Avago Technologies (NASDAQ: AVGO) following a sit down with management. Analyst Rick Schafer says that AVGO management's tone remains bullish as strength across its wireless and wired infrastructure segments is bolstered by the best M&A track record in the business.

Schafer commented, "We had the opportunity to sit down with AVGO CEO Hock Tan, CFO Tony Maslowski and Director of IR Asish Saran at company HQ on Day 1 of our 13th Annual Semiconductor Bus Tour. Not surprisingly, mgmt's tone remains bullish as strength across its wireless and wired infrastructure segments is bolstered by the best M&A track record in the business. In wireless, AVGO's focus remains securing incremental RF content as the trajectory of smartphone units remains a question mark. More specifically, FBAR demand continues to outstrip supply, and mgmt expects to have customers on allocation for the foreseeable despite efforts to double capacity by mid-2016. AVGO continues to view the semiconductor M&A landscape as a "target rich environment" and remains focused on building a sustainable business as the group continues to consolidate. In our view, the recent BRCM deal is likely to be another "over-achiever" as mgmt's $750M in outlined synergies excludes any pruning of under-performing business segments. Still in test, AVGO's 8" line is unlikely to be a material GM tailwind until CY17, as 6" is expected to represent the lion’s share of wafers through CY16."

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 $138.63 yesterday.

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