[ad_1]
A Broadcom chip in an Apple iPhone.
Brent Lewin | Bloomberg | Getty Images
The financial repercussions of the trade war between the United States and China begin. But a day later, chip maker Broadcom announced disappointing results, Wall Street analysts urge investors to remain calm.
The report dropped inventory tokens after the company reduced its revenue forecast, due to Huawei and the uncertainty of trade. Broadcom said the trade cost him $ 2 billion in annual revenue.
Broadcom shares are down 9% in Friday's pre-commercial trading.
"Here's the bottom line and it's not that bad," commented Citi analyst Christopher Danely. He maintained his odds, but lowered his price target to $ 300 instead of $ 320.
Other analysts have agreed.
"Net net, the lower fiscal year is a bigger than expected revision, but we do not think the sky is falling apart and we continue to think that the high return on capital keeps a bottom in the stock, and we hope the 2H will be conservative if trade tensions are resolved, "said Blayne Curtis, an analyst at Barclays.
A company has lowered its price target but remains confident that it can weather the storm.
"Broadcom is well positioned in this cyclical downturn due to its factory-less model, its specific growth drivers, its revenue diversification and the stability of its software revenues," said Baird analysts. "Combined with a strong cash flow generation and an attractive multiple, we consider Broadcom a high quality defensive name." The company raised its target price from 280 to 280 USD.
Here's what the main analysts say:
Barclays – overweight, price target of $ 315 to $ 315
"Turned down revenue for April but beat EPS with impressive opex savings and better margins, but the company raised its full-year forecast by 8%, highlighting a Increasing macroeconomic uncertainty and the impact of Huawei The company noted that its customers were operating more cautiously in the FQ2, but this trend of deterioration accelerated at the beginning of the FQ3 at the same time as the ban. Most companies have seen weaknesses for some time, which has prevented AVGO from maintaining its financial guidance for the last quarter, with additional catch-up and conservatism in the 2H, the revision makes more sense and is consistent with the outlook. we have heard in Asia a few weeks ago.Net Net, the lower level of the AF is a revision larger than expected, but no We do not believe that the sky is fading and we still think that the strong return on capital is keeping a trough in the action, and we hope that the 2H scenario will prove conservative if trade tensions disappear. "
Citi-Buy Evaluation, target price at $ 300 from $ 320
"Downgrading the forecast with Huawei in mind and $ 300 billion of additional tariffs, here is the bottom line and nothing less." Yesterday after closing, Broadcom announced lower-than-expected earnings and earnings for F2Q19 and lowered its forecast for the F19 due to a combination of Huawei's ban (5% of customers) and the threat of additional rates.We keep our purchase rating on AVGO because we think that EPS is close to a floor and because of its valuation as the stock is trading at 14.4X C20E EPS, below the average of its peers at 21.6X. "
J.P. Morgan – Overweight, Course Objective $ 350 to $ 350
"Despite short-term hurdles and declining revenue prospects for the year, the team expects better operating margins and 10 billion FCF from continuing operations, which means the dividend will pass at $ 11.75 – $ 12.00 per share in December or 10% growth 12% We are lowering our estimates for CY19 and deploying them, we are expecting a $ 25 earnings power Our price target is $ 350 and we reiterate our OW rating on AVGO, AVGO continues to be our top pick in semi and we will build stocks on weakness. "
Goldman Sachs – neutral evaluation, target price at $ 290 starting at $ 300
"While the surprising reduction and uncertain macroeconomic / trade outlooks likely maintain the short-term price range, and we maintain our neutral rating on the stock, our constructive view of Broadcom's competitive position in its semi-serviced markets, with deflated valuation multiples (ie 11 times EPS in fiscal 2014, a dividend yield of 11.5% for fiscal 2014, and a dividend yield of 5.3% for fiscal 2014 based on the reference price of USD 257.70), indicates an improved risk / return profile, "
Baird- Outperform Rating, price target from 280 to 280 USD from 300 USD
"Broadcom 's reduced revenue forecast for a full year goes against the 2H recovery thesis formulated by many semiconductor companies early in the year – unaware at the beginning of the year. a period of high and rising inventories Broadcom is well positioned in this cyclical slowdown, due to its unbranded model – Specific growth catalysts, revenue diversification and stability of software revenues Combined with strong cash flow generation and at an attractive multiple, we view Broadcom as a high quality defensive name. "
Morgan Stanley – Equal weighting index, price target from 250 to 250 USD from 262 USD
"We continue to be AVGO at equal weight, with a negative view of near-term activity, offset by the industry's leading margins." The increasing headwinds in Broadcom's key markets (networks, storage, smartphones) have finally been caught up with the latest The widespread slowdowns and the impact of Huawei weigh heavily on the 2H outlook, which is compounded by the decline in customer inventories – a dynamic that has kept us cautious in the semiconductor industry. "
Bank of America- Buy assessment, price target of $ 345 to $ 345
"Weak prospects on 2H could exert pressure on AVGO / peers (SWKS, QRVO, MRVL, XLNX and other peers of calculation) and on semi-finals in general, until we get a commercial resolution China / United States can regain the trust of our customers We assume that any volatile stock market In contrast, the latest AVGO PE 10 / 18x advance range and our 2320 FY20E EPS suggest that at a price of 258 USD after the normal hours of work, he is trading down his theoretical range of $ 230 to $ 414 ".
[ad_2]
Source link