Zacks Investment Research lowered shares of Broadcom (NASDAQ:AVGO) from a hold rating to a sell rating in a research note issued to investors on Wednesday morning.
According to Zacks, “Broadcom faces intensifying competition and integration risks due to frequent acquisitions. The company’s leveraged balance sheet and customer concentration continue to be headwinds. Moreover, estimates have remained stable lately ahead of company’s Q2 earnings release. Furthermore, the company’s stock has underformed the industry in the past year. However, the company has positive record of earnings surprises in recent quarters. The company is benefiting from strong demand of its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. Strong ties with leading OEMs across multiple target markets will help the company to gain key insights into the requirements of customers. The launch of the next generation WiFi products is expected to be a growth driver.Re-domiciliation to the USA and aggressive share buyback are other positives.”
A number of other equities research analysts have also recently issued reports on AVGO. Nomura reissued a neutral rating and set a $300.00 target price on shares of Broadcom in a report on Wednesday, May 9th. BidaskClub raised shares of Broadcom from a sell rating to a hold rating in a report on Wednesday, May 9th. DA Davidson lowered their target price on shares of Broadcom to $300.00 and set a positive rating on the stock in a report on Thursday, May 10th. B. Riley lowered their target price on shares of Broadcom from $335.00 to $310.00 and set a buy rating on the stock in a report on Tuesday, May 1st. Finally, Citigroup reduced their price target on shares of Broadcom from $300.00 to $275.00 and set a buy rating for the company in a research report on Tuesday, May 1st. One investment analyst has rated the stock with a sell rating, four have issued a hold rating, thirty-two have issued a buy rating and one has assigned a strong buy rating to the stock. Broadcom has an average rating of Buy and an average price target of $308.96.
Broadcom (NASDAQ:AVGO) last issued its earnings results on Thursday, March 15th. The semiconductor manufacturer reported $5.12 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.41 by $0.71. Broadcom had a net margin of 41.37% and a return on equity of 29.50%. The business had revenue of $5.33 billion for the quarter, compared to analysts’ expectations of $5.32 billion. During the same quarter in the previous year, the firm posted $3.63 EPS. The business’s revenue for the quarter was up 28.5% compared to the same quarter last year. sell-side analysts expect that Broadcom will post 16.82 EPS for the current fiscal year.
Broadcom declared that its Board of Directors has initiated a stock repurchase program on Thursday, April 12th that authorizes the company to repurchase $12.00 billion in shares. This repurchase authorization authorizes the semiconductor manufacturer to purchase up to 12.2% of its stock through open market purchases. Stock repurchase programs are typically a sign that the company’s board believes its shares are undervalued.
In related news, SVP Charlie B. Kawwas sold 997 shares of the company’s stock in a transaction on Friday, March 2nd. The shares were sold at an average price of $243.88, for a total value of $243,148.36. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Kirsten M. Spears sold 199 shares of the company’s stock in a transaction on Friday, March 2nd. The stock was sold at an average price of $243.88, for a total transaction of $48,532.12. The disclosure for this sale can be found here. Insiders sold 78,675 shares of company stock valued at $20,078,429 over the last quarter. 3.30% of the stock is owned by company insiders.
A number of hedge funds and other institutional investors have recently bought and sold shares of AVGO. Buckingham Capital Management Inc. boosted its position in Broadcom by 63.5% during the third quarter. Buckingham Capital Management Inc. now owns 2,346 shares of the semiconductor manufacturer’s stock valued at $569,000 after buying an additional 911 shares during the period. Atria Investments LLC boosted its position in Broadcom by 8.8% during the fourth quarter. Atria Investments LLC now owns 6,190 shares of the semiconductor manufacturer’s stock valued at $1,590,000 after buying an additional 499 shares during the period. E&G Advisors LP purchased a new stake in Broadcom during the fourth quarter valued at about $501,000. Asset Dedication LLC boosted its position in Broadcom by 63.2% during the fourth quarter. Asset Dedication LLC now owns 2,206 shares of the semiconductor manufacturer’s stock valued at $565,000 after buying an additional 854 shares during the period. Finally, Bach Investment Advisors Ltd purchased a new stake in Broadcom during the fourth quarter valued at about $259,000. Institutional investors and hedge funds own 89.02% of the company’s stock.
Broadcom Limited designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other.
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