Broadcom: What the Analysts Are Saying After the Earnings Report

Broadcom's quarter was assessed on Friday by analysts at RBC, JPMorgan, Morgan Stanley, Jefferies and Barclays. The shares are wavering.

Broadcom  (AVGO) - Get Report shares were wavering on Friday as analysts assessed the semiconductor company's first-quarter-earnings report from Thursday after the closing bell. 

RBC - Outperform (Price Target Lowered to $300 from $360)

"We see M&A integration, stock buybacks, and margin expansion driving earnings-per-share growth. We see the Symantec integration and margin expansion driving EPS upside in 2020/2021. On an annual basis, we see stable to slightly positive revenue trajectories for AVGO’s key businesses," RBC said. 

JPMorgan - Overweight (PT Lowered to $340 from $380)

"Despite near-term uncertainty and limited visibility stemming from Covid-19, the team continues to execute well and remains on track to transition to a company focused on cloud/hyperscale datacenter, service provider, and enterprise markets (sustainable growth trends, long product cycles, strong profitability profile, and synergies with silicon/software businesses)," analyst Harlan Sur wrote.

Morgan Stanley - Overweight (PT Lowered to $340 from $361)

"Given the uncertainty around Covid-19, we thought the company did a good job of framing potential outcomes. What is clearly being overlooked in the stock, however, is the 50%+ operating margins of this business and stability in software. We expect EPS to hold up much better than peers," analyst Craig Hettenbach said. 

Jefferies - Buy (PT Lowered to $300 from $380)

"By 2020, we expect AVGO's infrastructure software revenue to grow to 29% of total revenues. We view this as a major positive as 1) the business is highly predictable with 80-85% ratable revenue and 2) the shift makes the company less dependent on consumer product cycles," analyst Mark Lipacis wrote. 

Barclays - Overweight (PT Lowered to $320 from $360)

"AVGO indicated that booking trends were solid so far in the quarter, although visibility is limited and sized any potential impact to fiscal 2020 from Covid-19 as 5% to 10%. The stock has underperformed recently given higher debt load, but with a dividend yield now above 6% and a diversified business model, the name looks attractive to us," analyst Blayne Curtis wrote.

Broadcom at last check was off 5.4% at $206.89 a share.