RBC Capital Remains Bullish on Avago Tech (AVGO) After Meeting with Management
RBC Capital reiterated an Outperform rating and $150.00 price target on Avago Technologies (NASDAQ: AVGO) after meeting with management. AVGO remains focused on adding capacity to meet customer demand both from their largest customers and Chinese OEMs. Analyst Amit Daryanani expects the stock to sustain its outperformance driven by multiple self-help levers, which could result in $15 in EPS by CY18.
Daryanani commented, "We remain bullish on AVGO and expect the stock to sustain its outperformance driven by multiple self-help levers, which could result in $15 in EPS by CY18 (25% growth, 70% self-help levers). Key takeaways: 1) Wireless growth is constrained by 100% capacity utilization as current/future customers want more allocation of FBAR; 2) While content is stable with large OEMs, it's expected we see double digit (we think 20-30%+ conservatively) growth in next gen product (Fall-2016), 3) BRCM on schedule to close early 2016, keep an eye on MOFCOM deadlines in late-September; and 4) Positive HDD comments on conference call were reflective of PCs & enterprise."
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Shares of Avago Technologies closed at $128.72 yesterday.