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Brean Capital Cuts Price Target on Avago Tech (AVGO) Following 3Q15 Results

August 27, 2015 7:00 AM

Brean Capital maintained a Buy rating on Avago Technologies (NASDAQ: AVGO), and cut the price target to $170.00 (from $180.00), following the company's 3Q15 earnings report. Avago reported July revenues of $1.75B, above the Street’s consensus estimate of $1.74B. EPS of $2.24 beat the Street’s consensus estimate of $2.14. Analyst Mike Burton said that The strong results were largely due the Emulex (ELX) acquisition which closed in early May and supported by the beginnings of the Apple (AAPL $109.69, Buy) ramp in Mobile.

Burton commented, "Avago reported a solid beat and guide despite market turbulence and more cautious commentary from competitors. Apple continues to drive results as the Company’s Mobile segment drove July revenues and is set up for a seasonally strong October quarter. Although
the Company guided revenues slightly below consensus, gross margins and OPEX are looking better than expected, and therefore EPS guidance is ahead of the Street. We were already inline with margins so while we are adjusting our EPS slightly, our TP is coming down to $170 from $180 due to the multiple contraction in Semis in general. We continue to believe that the name is too cheap with synergies to come and a world-class diversified semiconductor portfolio."

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 $116.20 yesterday.

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