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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