Wednesday, December 5, 2012

Analysts expect Broadcom Corporation (NASDAQ:BRCM) to raise forecast

Ahead of Broadcom Corporation(NASDAQ:BRCM)’s analyst day on Thursday, BMO Capital iterated its Outperform rating on the stock and its price target of $40 a share.

The Street is expecting Broadcom to raise its forecast for the current quarter.

Ambrish Srivastava of BMO Capital said he is looking for revenue of $2.03 billion and EPS of 68 cents for the current quarter, versus the company’s outlook, offered in October, of $1.95 billion to $2.1

Michael McConnell of Pacific Crest also maintained his Outperform rating for the company and his $41 a share price target and he too believes that the company may hike its forecast. His own estimate is $2.02 billion and 70 cents.

There are a number of things that analysts want to hear from Broadcom at its analyst day - operating expenses, growth drivers for its connectivity business including chips for Wifi as well as about the short-range broadband standard “802.11ac” within that market.

Broadcom has been facing challenges in terms of a shift in the chip industry to smaller transistor geometries and analysts would like to know how the company plans to tackle this.

Most of all the analysts want the company to talk about 802.11 ac and its own initiatives in the handset “baseband” chip market against Qualcomm.

McConnell writes: 802.11ac [...] is important to Broadcom because it: (1) is another barrier to competitive integration risk and (2) drives a 25% to 40% ASP increase over the legacy 802.11N standard.

Lazard Capital Markets also has a Buy rating on the stock with a price target of $45 a share. It estimates current quarter revenues at $2.05 billion.

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