Nomura Securities Maintains a 'Neutral' on Avago Technologies (AVGO); 4Q Earnings Preview

Nomura Securities maintains a 'Neutral' on Avago Technologies (NASDAQ: AVGO) price target of $30.00.

Nomura analyst, Romit Shah, said, "We expect Avago to meet F4Q (Oct) guidance of 2-5% revenue growth. Our estimates are at $624mn/$0.72, versus consensus at $623mn/$0.71. Although the guidance may look conservative given 80% of the projected revenue was already booked in late August, we believe the ongoing inventory adjustment in the industrial market (30% of sales) will be a headwind. By end market, we expect wireless communications (37% of sales) to grow driven by strength at Apple, but partially offset by weakness at HTC. We expect all other end market segments to be flat to slightly down. Due to higher mix of wireless, we expect gross margin to decline slightly to 51.5% from 51.7% in the previous quarter."

"We expect F1Q (Jan) revenue guidance to be lower than our estimate of 4% QoQ decline and consensus of 3% decline (10-year seasonal average is 4% decline)."

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 $28.44 yesterday.

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