Nomura Securities Maintains a 'Buy' on Broadcom (BRCM); Raising Estimates on NETL Acquisition

Nomura Securities maintains a 'Buy' on Broadcom (NASDAQ: BRCM) price target of $45.00.

Analyst, Romit Shah, said, "We are raising our estimates to include the NETL acquisition that closed on February 17. There are no changes to our estimates for the core business. We are modeling the deal to be accretive by $0.07 in 2012 and $0.11 in 2013, including options. On a non-GAAP basis, we estimate accretion at $0.15 in 2012 and $0.20 in 2013. EPS (incl ESO) increases from $2.25 to $2.32 for 2012E, and from $2.50 to $2.61 for 2013E. Our key assumptions are the following: (1) 10.5 months of NETL operations ($368mn of sales) included in our 2012 estimates, (2) seasonal revenue growth in 2012, and (3) no cost synergies. Broadcom trades at 14x CY13E EPS of $2.61 and 1.8x EV/Sales versus 2.3x for our coverage universe. That’s a 22% discount, versus a five-year average discount of 10%."

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 $37.66 yesterday.

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