Broadcom Limited (AVGO) Management Meeting Highlights VMWare Plan - Oppenheimer

Oppenheimer analyst Rick Schafer reiterated an Outperform rating and $700.00 price target on Broadcom Limited (NASDAQ: AVGO) after hosting a management meeting with CEO Hock Tan, CFO Kirsten Spears, and IR Director Ji Yoo where the tone was bullish and laid out a strategy/vision on the $61B deal for VMware.

The analyst stated "VMW's mission-critical vSphere is ubiquitous (>300,000 customers) and comes with a full ecosystem, fitting the profile of a franchise asset. vSphere platform market share tops 95%. Deal is expected to close in FY23 following regulatory approvals. Post-close, AVGO will utilize a proven playbook to 1) focus on core products/customers and 2) reduce non-core costs/improve profitability. We expect divesitures to play a role in cost-reduction efforts as mgmt streamlines to focus on 1,500 strategic accounts. We believe Carbon Black (Security) and Tanzu (DevOps) are potential "for sale" assets. AVGO believes it can increase $4.7B EBITDA (~36%) today to $8.5B (65%). This target is 500bp below CA/SYMC’s 70% margin given the need to support VMW’s large, long-tailed customer base."

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 $520.17 yesterday.

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