UPDATE: D.A. Davidson Reiterates Neutral Rating, Raises PT on Avago Technologies Ltd. Following Solid FQ3 Revenue

In a report published Wednesday, D.A. Davidson analyst Thomas Diffely reiterated a Neutral rating on

, and raised the price target from $39.00 to $41.00. In the report, D.A. Davidson noted, “Avago reported FQ3 revenue of $644 million (up 14.6% sequentially) and pro-forma EPS of $0.74, ahead of the consensus view of $623 million and $0.66, respectively. Results included incremental revenue of $21 million from the recently acquired CyOptics business (a 5-week contribution). Gross margins dropped 30bp sequentially to 50.9%, as a strong product mix was more than offset by the acquisition, and operating expenses increased $7 million sequentially (to $137 million). Foxconn was the only 10%+ customer as Samsung fell below the threshold.” Avago Technologies Ltd. closed on Tuesday at $36.56.