Combined Avago (AVGO)/Broadcom Doubles the Revenue Base - RBC

RBC Capital analyst, Amit Daryanani,published new estimates on Avago Technologies (NASDAQ: AVGO) for the combined company where revenue more than doubles and EPS accretion ramps over the year.

AVGO could generate $16B+ in revenues in FY17E and EPS in the $12 range, with further EPS upside from future divestitures and continued debt paydown.

Near-term, the analyst can see ~$0.10 in EPS accretion from BRCM in the Apr-qtr and $1 in accretion for CY16. Long-term, AVGO could generate $15+ in annual EPS, as they continue to reduce interest expense and generate further synergies from ~$500M in potential divestitures.

Estimates for the combined asset call for April-qtr rev/EPS at $3.62B/$2.27 compared with n $1.65B/$2.11 for AVGO standalone.

Jul-qtr, estimates now call for $3.86B/$2.50 vs. Street at $3.81B/$2.59. For FY16E, revenue/EPS estimates call for $13.43B/$10.11 vs. Street at $13.74B/$10.16.

The firm maintained a Top Pick rating and price target of $170.

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 $136.12 yesterday.

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