Reasons To Expect A Broadcom Beat In Q2

Broadcom Ltd AVGO will report its second-quarter earnings Thursday. Analysts are expecting the company to fall in line with guidance, with strong potential for beat.

Deutsche Bank's Take

Deutsche Bank analyst Ross Seymore expects Broadcom’s wireless business to show a seasonal trough, while the wired side ought to show modest growth quarter over quarter.

Broadcom will report revenue of $4.1 billion, in line with the $4.025 billion to $4.175 billion guidance, according to Deutsche Bank projections. "There may be modest EPS upside potential vs. [the Deutsche Bank and Street estimates]” given solid peer reports and downstream trends, Seymore said. 

Deutsche Bank reiterated a Buy and price target of $255 on Broadcom. 

Loop's Perspective

Loop Capital Markets analyst Betsy Van Hees is feeling more bullish on Broadcom. Loop reiterated a Buy and raised its price target to $270 from $251 on the stock. 

“We are increasing our FQ2 pro forma EPS estimate to $3.56 from $3.48 above the street estimate of $3.50 and our revenue estimate to $4.2 from $4.8 billion, also above the street estimate of $4.1 billion,” Van Hees said in a note. 

The analyst expects the revenue beat to be driven by “classic Broadcom wired infrastructure products” and a less-than-seasonal wireless trough thanks to increased smartphone demand.

Broadcom was also recently granted conditional antitrust clearance by the European Commission for a proposed merger with Brocade Communications.

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