Broadcom Limited (NASDAQ: AVGO)
AVGO reported strong earnings numbers this morning and shares are soaring higher by over 7% in pre- market trading. AVGO reported earnings of $2.53 a share on revenues of $3.6 Billion. Can this stock continue to dominate the space?
Analyst Expectations
Analysts at Mizuho had the following comments on AVGO.
AVGO reported its AprQ (the first full quarter with BRCM) Rev/EPS at $3.6B/$2.53, Revenue was inline and EPS was well above. The company guided to a strong JulQ. The wireless and storage segments were modestly weaker, as expected. CEO Hock offered an impressive JulQ guide with wireless growing 25% q/q and accelerating into the October quarter, with improving GM/OM and our F17E FCF estimate now at ~$10B, as AVGO drives topline and cost synergies ahead of street expectations. Reiterating our Buy and raising estimates and PT to $190.
Analysts at Bank of America Merrill Lynch weighed in as well.
Product diversity drives beat/raise, solid 2H/l-t position We reaffirm Buy, a top pick on US1-listed AVGO; we raise our FY16/17E EPS by 3%/1% to $10.97/$12.78 and raise our PO to $210 from $200. As we noted in our recent deep dive, the Q2 beat and strong Q3 outlook mark an inflection point since they: 1) reassure iPhone 6S weakness is behind and iPhone 7 strength is ahead with 20%+ content gains; 2) raise awareness about AVGO’s product diversity and new product strength in cloud/datacenter/ cable; and 3) underscore the company’s execution consistency with EPS growing 2x faster than sales. Overall we see a company with 5-6% sales, 12% EPS CAGR, 10% annual dividend growth (1.3% div yield currently), and path to $15/sh in pf-EPS.
About Broadcom Limited
Broadcom Limited is a semiconductor company. The Company offers a range of products in end-markets, including wired infrastructure, wireless communications, enterprise storage, and industrial and others. The Company’s products are used in various applications, including data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays. The Company’s product categories include broadband access and modems, enterprise and network processors, Ethernet communication and switching, set-top box and media processors, wireless infrastructure and wireless connectivity. Its broadband access and modems category consists of products, such as Universal 1024 quadrature amplitude modulation (QAM) Modulator, Universal DOCSIS 2.0-Based Downstream Modulator, Dual Universal DOCSIS/EuroDOCSIS 2.0 Burst Receiver, DOCSIS/EuroDOCSIS 2.0-Based Cable Modem Termination System and QAMLink DOCSIS/EuroDOCSIS 2.0 Single-Chip Cable Modem.
