Benchmark Downgrades Broadcom Corporation

In a note dated June 17th, Benchmark analyst Gary Mobley downgraded Broadcom Corp.

from Buy to Hold and maintained a $40 price target. Mobley began the note by referencing Broadcom's June 2nd announcement to divest its cellular baseband business. He continued by stating that, while the firm is still publishing its respective 2014 and 2015 non-GAAP EPS estimates of $2.65 and $2.75, he anticipates a ~$0.40 accretion from the divestiture in fiscal 2015. In a look at the company's current price, Mobley says Broadcom might be trading at a multiple discount (12-13 vs. 13-15 of competitors) due to worries related to growth. He says the concern is coming from lost market share in low to mid range combo connectivity chip sales as the company exits the baseband market. Following the release of the note shares of Broadcom are trading ~1 percent lower in Tuesday's pre-market session.