Story updated at 9:45 a.m. to reflect market activity.
Shares of Avago gained 9.9% to $83.92 in morning trading.
The analyst firm also raised its EPS estimates for the chipmaker through 2015. Sterne Agee expects Avago to report earnings of $1.68 a share for the fourth quarter, up from its previous estimate of $1.25 a share for the quarter. The firm expects earnings of $4.63 a share for full-year 2014, and $7.30 a share for full-year 2015, up from $4.06 and $5.88, respectively.
Avago has a lot of operating momentum according to Sterne Agee analysts.
Separaetly, TheStreet Ratings team rates AVAGO TECHNOLOGIES LTD as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AVAGO TECHNOLOGIES LTD (AVGO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."