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UPDATE: Morgan Stanley Reiterates on Broadcom on Strong Networking, Weak Wireless

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In a report published Friday, Morgan Stanley analyst Joseph Moore reiterated an Overweight rating on Broadcom (NASDAQ: BRCM), but removed the $34.00 price target.

In the report, Morgan Stanley noted, “Value potential is clear; it's taking time but we are inching closer to realizing it. The stock is increasingly inexpensive on sum of the parts attributing zero value to wireless as networking strengthens (11.6x 2014 EPS ex cash for a non-wireless business that grew 18% y/y this qtr, see page 2). But wireless trends are discouraging, as they lower targets on LTE baseband to sub $100 mm (less than 20% of baseband R&D spending!), take an impairment on the Renesas deal, and hedge on connectivity growth for the year.

"Meanwhile Intel's new segmentation showing $3 bn in mobile segment losses makes the lack of profit potential for subscale LTE contenders crystal clear.”

Broadcom closed on Thursday at $31.14.

Latest Ratings for BRCM

Apr 2015Deutsche BankMaintainsBuy
Apr 2015JefferiesMaintainsBuy
Apr 2015BarclaysMaintainsEqual-weight

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