Barron's Says Broadcom (BRCM) Could Jump 40%

In this week's Barron's, it wrote an incredibly bullish story on Broadcom (Nasdaq: BRCM). Barron's believes as Broadcom takes more market share providing cutting-edge chips in the smartphone market, BRCM could rise as much as 40%.

For example, Broadcom has been the supplier of the global-positioning system technology and touch-screen controller chip for the Apple iPhone since its launch last year. Additionally, Broadcom chips are at the core of Motorola (NYSE: MOT) cable set-top boxes and Netgear (Nasdaq: NTGR) wireless routers.

"They are in the right markets with the right products," says Daniel Berenbaum, communications semiconductor analyst at Cowen & Co.

Berenbaum estimates BRCM free cash flow should reach $1 billion or more by 2010. He says investors should pay 25 times free cash flow per share. Based on the $1.51 per share in free cash flow expected from Broadcom in '09, that would put the stock at $37.75, or about 40% higher than the current level of $27.17.

Broadcom is trading at approximately 16 times earnings, the shares are well below their median level of 24 times earnings for the past five years. With Broadcom trading at only 16 times earnings and on pace to take significant market share in the smartphone market, Broadcom is a company you should take a serious look at as a bet on the growth in the smartphone market.

Sign up at EasyStockAlerts.com & Track Your Solar News!!!

You May Also Be Interested In

• TD Cowen Reiterates Buy Rating on Tesla (TSLA), well-positioned to scale in US AV market
• Navan Inc (NAVN) PT Raised to $34 at TD Cowen
• Cellebrite (CLBT) PT Lowered to $15 at TD Cowen