UPDATE: Goldman Sachs Initiates Neutral on Avago Technologies on Balanced Risk/Reward

Goldman Sachs initiated its coverage on Avago Technologies (NASDAQ: AVGO) with a Neutral rating and a price target of $40 a share.

Goldman Sachs commented, "We are constructive on Avago's growth trajectory in the wireless market, driven by strong exposure to Apple, LTE technology and Qualcomm-based smartphone designs. We also believe Avago can drive outsized growth in enterprise networking with share gains at Cisco, Juniper and HP as its high-performance technology is differentiated in this market. However, we think the Avago story is well understood by the market and risk/reward is now balanced, as Avago's multiple already reflects a growth premium (13X 2013E EPS vs. semis at 12X) and the stock has outperformed the SOX by 23% ytd."

Avago Technologies closed at $36.69 on Wednesday.

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