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UPDATE: Brean Capital Lowered Estimates and PT on Broadcom Ahead of Q3 Earnings

In a report published Friday, Brean Capital, LLC analyst Mike Burton lowered estimates and the PT of Broadcom Corp. (NASDAQ: BRCM) ahead of Q3 earnings.

Broadcom is scheduled to report Q3 earnings on Tuesday, October 22nd after the market close. Brean Capital noted the possibility of lower numbers due to the completion of the Renesas acquisition on October 1st. Expecting share loss, Burton lowered the PT from $36 to $35 and reiterated a Buy rating.

The analyst increased near-term OPEX per Brean Capital's guidance. Burton wrote, "We cannot verify the accuracy of the reports, but we have seen some reports in the blogosphere that BRCM has already begun to layoff 100's of workers, especially in LTE development."

Brean Capital modeled a bear case scenario which reflects an estimated 75% market share loss in WiFi to competitors and to handicap the risk associated with an unsuccessful Mobile sector. This bearish valuation would equate to $31, or a 15% upside from current levels.

The analyst adjusted his Q4 revenue estimate from $2.10B to$2.12B and non-GAAP EPS from $0.66 to $0.57. Brean Capital decreased CY2014 and CY2015 revenues from $8.714B to $8.709B, and $9.401B to $9.348B, respectively. Non-GAAP EPS followed moving from $2.78 to $2.61 in 2014 and from $3.14 to $2.97 in 2015.

Broadcom shares closed at 27.01 on Thursday.

Posted-In: Brean Capital LLC Mike BurtonAnalyst Color Price Target Analyst Ratings

 

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