UBS Reiterates Buy Rating on Broadcom Limited (AVGO) Following VMWare Deal Update

UBS analyst Timothy Arcuri reiterated a Buy rating and $690.00 price target on Broadcom Limited (NASDAQ: AVGO) after providing an update on the pending VMware deal. They continue to like AVGO stock.

The analyst commented, "Margin expansion targets are aspirational, but this deal is still more about growth than buying cash flow (as was the case w/the SYMC/CA deals) because it likely transforms AVGO into more of a full stack provider of both hardware and software solutions for private cloud. Many of VMWs multinational enterprise customers are also big consumers of AVGO semiconductor solutions in their network infrastructure. AVGO has likely learned a lot from prior software deals, but customer concerns around innovation and price increases are high, so execution will be critical. Our math suggests the deal could be >20% accretive to EPS in C2025E. We also now estimate that post deal closure, there is a path to nearly $23/share dividend by C2024 (nearly 5% yield for a great company with solid growth potential)."

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

Shares of Broadcom Limited closed at $506.57 yesterday.

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