UPDATE: Bank of America Reiterates Buy Rating, Raises PT on Broadcom Corporation on Underappreciated Sum of Parts

Loading...
Loading...
In a report published Friday, Bank of America analyst Vivek Arya reiterated a Buy rating on
Broadcom CorporationBRCM
, and raised the price target from $45.00 to $50.00. In the report, Bank of America noted, “BRCM trades at a 20%+ discount to the sector as investors worry about competitive risks in Wi-Fi connectivity and dilution from stock comp expense. However, we think the Street could be overlooking BRCM's core, leadership in attractive Networking and Broadband markets that account for 60%+ of sales and 80%+ of profits. We develop a sum of parts model that suggests a valuation of $46/sh (15% potential upside) even if Wi-Fi connectivity has zero value, primarily on the strength in the core business, with upside to $54/sh (35% potential upside) if connectivity sales can stabilize.At just 12x PE, 9x 2015E EV/EBTDA, solid 7-8% FCF yield, BRCM's assets look too attractive and transformation too impactful to ignore in a consolidating industry, in our view.” Broadcom Corporation closed on Thursday at $40.12.
Posted In: Analyst ColorPrice TargetAnalyst RatingsBank of AmericaVivek Arya
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...