FBR Capital Maintains an 'Outperform' on Broadcom (BRCM); Business Tracking In Line but Stock Reflects Lower Expectations
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Price: $54.67 --0%
Rating Summary:
15 Buy, 29 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 9 | New: 24
Rating Summary:
15 Buy, 29 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 9 | New: 24
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FBR Capital maintains an 'Outperform' on Broadcom (NASDAQ: BRCM), PT $49.
FBR analyst says, "Recent checks suggest Broadcom's 1Q revenues are tracking slightly above its revenue guidance midpoint of $1.8B (–7.5% QOQ) as some weakness in smartphone production (at Samsung and LG (NYSE: LGL)), some optical/networking choppiness, and seasonally lower shipments of consumer and smartphone devices more than fully offset sequential revenue goodness from Apple (Nasdaq: AAPL). For 2Q11, Broadcom could grow revenues 5% QOQ, in line with the Street. Broadcom's 1H11 business is unlikely to upside investor expectations, with some concerns about Nokia (NYSE: NOK) unit share losses shrinking the Broadcom baseband opportunity, increasing competition for connectivity chips (from Qualcomm (Nasdaq: QCOM), Mediatek, TI (NYSE: TXN and Marvell (Nasdaq: MRVL)), and optical/networking choppiness all weighing on shares."
"While we understand these concerns, we think "smartphone mania" will heat up again in 2H11, and that Broadcom will get back to beating and raising - assuming no Japanese supply constraints - given its near dominance of smartphone connectivity and relatively high Apple exposure (see Apple supply chain note published today). Given our view, we think investors should buy shares at today's levels, with a likely opportunity that the stock achieves our price target in 2H11, although possibly with shares range bound until Labor Day..."
For more ratings news on Broadcom click here and for the rating history of Broadcom click here.
Shares of Broadcom closed at $40.57 yesterday.
FBR analyst says, "Recent checks suggest Broadcom's 1Q revenues are tracking slightly above its revenue guidance midpoint of $1.8B (–7.5% QOQ) as some weakness in smartphone production (at Samsung and LG (NYSE: LGL)), some optical/networking choppiness, and seasonally lower shipments of consumer and smartphone devices more than fully offset sequential revenue goodness from Apple (Nasdaq: AAPL). For 2Q11, Broadcom could grow revenues 5% QOQ, in line with the Street. Broadcom's 1H11 business is unlikely to upside investor expectations, with some concerns about Nokia (NYSE: NOK) unit share losses shrinking the Broadcom baseband opportunity, increasing competition for connectivity chips (from Qualcomm (Nasdaq: QCOM), Mediatek, TI (NYSE: TXN and Marvell (Nasdaq: MRVL)), and optical/networking choppiness all weighing on shares."
"While we understand these concerns, we think "smartphone mania" will heat up again in 2H11, and that Broadcom will get back to beating and raising - assuming no Japanese supply constraints - given its near dominance of smartphone connectivity and relatively high Apple exposure (see Apple supply chain note published today). Given our view, we think investors should buy shares at today's levels, with a likely opportunity that the stock achieves our price target in 2H11, although possibly with shares range bound until Labor Day..."
For more ratings news on Broadcom click here and for the rating history of Broadcom click here.
Shares of Broadcom closed at $40.57 yesterday.
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