Out of the 34 analysts covering Broadcom (AVGO), 25 analysts have rated the stock a “buy,” while nine analysts rated the stock a “hold.” Not a single analyst has given the stock a “sell” rating. Analysts have set a target price of $307.03 for the stock and a median consensus estimate of $310.00. Broadcom is now trading at a ~5.2% discount to its consensus median target estimate.
Optimism on Broadcom
Analysts seem to be optimistic on the stock after the company topped its earnings estimates in the first quarter of fiscal 2019. It reported results on March 14. Both earnings and revenues also grew year-over-year, and the company maintained its fiscal 2019 revenue guidance despite a slowdown in chip demand in China. The infrastructure software segment fueled earnings and revenues in the quarter aided by the acquisition of CA Technologies, which was closed in November 2018.
Despite a strong performance of the networking business, the chipmaker witnessed a decline in its semiconductor solutions business due to weakness in the wireless division. The company continues to expect the wireless unit to decline in the second quarter. However, the company expects the wireless and networking business to revive in the second half of the fiscal year. While the networking business is expected to rise on volume production of its new products, the Tomahawk 3 switching chip and the Jericho2 packet processors, the wireless unit is likely to grow on increased adoption of Wi-Fi and Bluetooth chips used by Samsung (SSNLF) that support the new Wi-Fi 6 standard.
Broadcom’s market capitalization
Broadcom’s market capitalization stands at $116.3 billion on March 18. Broadcom’s semiconductor rivals Qualcomm (QCOM), NVIDIA (NVDA), Micron (MU), and Advanced Micro Devices (AMD) have a market cap of $68.8 billion, $102.4 billion, $44.4 billion, $23.4 billion, respectively.
Broadcom’s earnings topped Wall Street's expectations in the first quarter of fiscal 2019, the results for which it reported on March 14.
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