Brean Capital Raises Price Target on Broadcom Ltd. (AVGO) to $205 Following 3Q
Brean Capital reiterated a Buy rating on Broadcom Limited (NASDAQ: AVGO), and raised the price target to $205.00 (from $200.00), following the company's 3Q earnings report. AVGO reported revenues of $3.802B vs. Street consensus of $3.756B. EPS of $2.89 beat the Street consensus of $2.77. AVGO also guided FQ4 non-GAAP revenue to $4.1B +/- $75M vs. Street at $4.056B.
Analyst Mike Burton commented, "AVGO reported another impressive quarter as the company highlighted not only its successful efforts to position itself in some of the strongest and fast growing end markets in the semiconductor industry such as Data Center/Networking and Wireless, but also more importantly, AVGO demonstrated how this strategy is paying off in leverage in the financial model of the combined company as EPS is “out growing” revenue on a sequential basis by 2x at least for the Jul-16Q and Oct-16Q. Consistent with our preview, AVGO reported a beat and raise off the product cycles in both Wireless and Wired Infrastructure (which performance was hindered by component constraints in STBs). Netting out the results and guidance, we are raising our CY17 EPS estimates by ~2.5%, increasing our target commensurately from $200 to $205, and reiterating our BUY rating on AVGO. We believe Broadcom is poised for above-average growth with industry leading profitability (not to mention its cheap valuation)."
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Shares of Broadcom Limited closed at $177.09 yesterday.