Skip to main content

Market Overview

Broadcom: Expect Softening Performance Metrics In 2015, But Company Is Still Well Positioned In The Market

Share:

In a report issued Friday, Tigress Financial's Chief Investment Officer Ivan Feinseth downgraded shares of Broadcom Corporation (NASDAQ: BRCM) from Strong Buy to Buy.

He explained that, while the company is "in a great position to benefit from the expansion of China's LTE network and increasing adoption of wearable technology among other trends," the firm sees weakness in the connectivity business making of 2015 a more challenging year than 2014.

Two main points are highlighted in the report:

"Performance metrics are expected to moderate further in 2015." The company's revenue growth rate fell from 5.1 percent in 2013, to 2.5 percent in 2014; the firm is expecting flat sales in 2015 on the back of a sluggish connectivity business. The analysts also expect margins to come under pressure over 2015 and are projecting EBITDAR margin to drop from 48.7 percent in 2014 to 46.9 percent in 2015. Moreover, they see Broadcom's NOPAT margin declining from 14.3 percent to 11.1 percent.

"BRCM continues to be a strategically important supplier to its customer base." Even in spite of Tigress Financial's anticipation of worsening performance, the company's position remains strong. "The rollout of China's LTE network via the joint efforts by the country's largest telecom companies China Mobile, China Unicom and China Telecom is largely dependent on equipment from BRCM and we [the analysts] believe this will be a tailwind for the company as that build out progresses. BRCM also remains an important supplier to Apple (AAPL-US, Strong Buy) and is benefiting from the continued strong uptake of that company's products."

Latest Ratings for BRCM

DateFirmActionFromTo
Jan 2016BernsteinDowngradesOutperformMarket Perform
Oct 2015B. Riley FBRDowngradesBuyNeutral
Aug 2015WedbushDowngradesOutperformNeutral

View More Analyst Ratings for BRCM
View the Latest Analyst Ratings

 

Related Articles (BRCM)

View Comments and Join the Discussion!

Posted-In: china mobile China Telecom china unicom Ivan Feinseth Tigress FinancialAnalyst Color Downgrades Analyst Ratings

Latest Ratings

StockFirmActionPT
FSRMorgan StanleyMaintains40.0
NATJefferiesMaintains2.8
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
PSXMizuhoMaintains96.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com