Zacks Investment Research Downgrades Broadcom (NASDAQ:AVGO) to Hold

Zacks Investment Research lowered shares of Broadcom (NASDAQ:AVGO) from a buy rating to a hold rating in a report published on Friday, March 16th.

According to Zacks, “Broadcom reported impressive first-quarter results. The company is benefiting from strong demand of its wireless solutions and expanding product portfolio, which makes it well-positioned to address the needs of rapidly growing technologies like IoT and 5G. The company also has strong ties with leading OEMs across multiple target markets that will help it to gain key insights into the requirements of customers. Moreover, the upcoming launch of the next generation WiFi products is expected to be a growth driver for the segment. However, customer concentration, intensifying competition, integration risks due to frequent acquisitions and leverage balance sheet are key headwinds. Further, President Trump recently released an order, asking Qualcomm to immediately and permanently abandon its proposed takeover by Broadcom on grounds of national security concerns. This doesn't bodes well for the company.”

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A number of other analysts have also recently issued reports on AVGO. Jefferies Group restated a buy rating and set a $332.00 price objective on shares of Broadcom in a research report on Friday, March 16th. Deutsche Bank began coverage on Broadcom in a research report on Thursday, March 15th. They set a buy rating and a $325.00 price objective on the stock. Canaccord Genuity restated a buy rating and set a $340.00 price objective (up from $325.00) on shares of Broadcom in a research report on Friday, March 16th. Drexel Hamilton reaffirmed a buy rating and issued a $313.00 price target (up previously from $302.00) on shares of Broadcom in a research note on Friday, March 16th. Finally, JPMorgan Chase reaffirmed an overweight rating and issued a $340.00 price target on shares of Broadcom in a research note on Friday, March 16th. Five equities research analysts have rated the stock with a hold rating, thirty-one have given a buy rating and one has issued a strong buy rating to the stock. Broadcom has a consensus rating of Buy and a consensus price target of $313.89.

Shares of NASDAQ AVGO opened at $228.87 on Friday. The company has a market capitalization of $94,008.81, a price-to-earnings ratio of 14.38, a price-to-earnings-growth ratio of 1.04 and a beta of 0.92. The company has a current ratio of 5.70, a quick ratio of 5.04 and a debt-to-equity ratio of 0.60. Broadcom has a 12 month low of $208.44 and a 12 month high of $285.68.

Broadcom (NASDAQ:AVGO) last released its quarterly earnings data on Thursday, March 15th. The semiconductor manufacturer reported $5.12 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.41 by $0.71. The business had revenue of $5.33 billion for the quarter, compared to analysts’ expectations of $5.32 billion. Broadcom had a return on equity of 29.50% and a net margin of 41.37%. Broadcom’s quarterly revenue was up 28.5% on a year-over-year basis. During the same period in the previous year, the business posted $3.63 earnings per share. research analysts forecast that Broadcom will post 17.43 earnings per share for the current fiscal year.

The company also recently declared a quarterly dividend, which was paid on Thursday, March 29th. Stockholders of record on Thursday, March 22nd were paid a dividend of $1.75 per share. This represents a $7.00 annualized dividend and a dividend yield of 3.06%. The ex-dividend date of this dividend was Wednesday, March 21st. This is a positive change from Broadcom’s previous quarterly dividend of $0.40. Broadcom’s dividend payout ratio is 48.95%.

In related news, insider Hock E. Tan sold 20,000 shares of the company’s stock in a transaction dated Tuesday, January 16th. The stock was sold at an average price of $265.21, for a total value of $5,304,200.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, SVP Bryan Ingram sold 9,396 shares of the company’s stock in a transaction dated Wednesday, March 14th. The shares were sold at an average price of $259.81, for a total value of $2,441,174.76. The disclosure for this sale can be found here. Insiders have sold 98,675 shares of company stock worth $25,376,429 in the last ninety days. 3.30% of the stock is currently owned by insiders.

Several institutional investors have recently made changes to their positions in the business. Chemical Bank boosted its position in shares of Broadcom by 6.8% during the fourth quarter. Chemical Bank now owns 19,169 shares of the semiconductor manufacturer’s stock worth $4,925,000 after buying an additional 1,213 shares during the period. Xact Kapitalforvaltning AB boosted its position in shares of Broadcom by 6.3% during the fourth quarter. Xact Kapitalforvaltning AB now owns 83,865 shares of the semiconductor manufacturer’s stock worth $21,545,000 after buying an additional 4,943 shares during the period. Envestnet Asset Management Inc. boosted its position in shares of Broadcom by 4.3% during the fourth quarter. Envestnet Asset Management Inc. now owns 107,777 shares of the semiconductor manufacturer’s stock worth $27,690,000 after buying an additional 4,428 shares during the period. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp boosted its position in shares of Broadcom by 6.6% during the fourth quarter. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp now owns 220,793 shares of the semiconductor manufacturer’s stock worth $56,722,000 after buying an additional 13,689 shares during the period. Finally, We Are One Seven LLC acquired a new position in shares of Broadcom during the fourth quarter worth about $142,000. Institutional investors own 89.47% of the company’s stock.

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Broadcom Company Profile

Broadcom Limited designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other.

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