Susquehanna Downgrades Broadcom (BRCM) to Neutral Amid Takeover; Sees No Rush to Sell Stock
Susquehanna downgraded Broadcom (NASDAQ: BRCM) from Positive to Neutral with a price target of $58.00 (from $54.00) after the company agreed to be acquired by Avago in a cash and stock valued at approximately $37 billion.
Analyst Chris Caso commented, "Since about half the transaction will be in AVGO stock, BRCM's stock performance going forward will now be dependent on AVGO's stock performance. Since we don’t presently cover AVGO, we aren't in a position to offer an investment recommendation for AVGO at this time, and our rating system is therefore forcing us to downgrade the stock since it has exceeded our PT. However, we don’t think investors need to be in a rush to sell the stock, particularly since we wouldn't rule out the potential for an alternate bidder to emerge - we do consider BRCM a very attractive asset, and the deal premium announced is only $4 ahead of our prior 12-month BRCM PT. We think companies such as INTC and QCOM may have some interest now that it's clear BRCM is for sale."
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 $56.25 yesterday.