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Broadcom Rose on June 27 after Analyst Rating Upgrade

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Jul. 6 2016, Updated 9:06 a.m. ET

Broadcom’s price movement

The US-based (SPY) Broadcom (AVGO) has a market cap of $57.2 billion. It rose by 4.3% to close at $149.77 per share on June 28, 2016. The stock’s weekly, monthly, and trailing 12-month (or TTM) price movements were -3.8%, -2.3%, and 13.5%, respectively, on the same day.

Broadcom is trading 4.9% below its 20-day moving average, 1% below its 50-day moving average, and 1.7% above its 100-day moving average.

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Related ETF and peers

The Technology Select Sector SPDR ETF (XLK) invests 1.4% of its holdings in Broadcom. The market caps of Broadcom’s competitors are as follows:

  • Freescale Semiconductors (FSL): $11 billion
  • Flextronics (FLEX): $6.1 billion

Broadcom receives a “buy” rating from Morgan Stanley

On June 27, 2016, Broadcom received a “buy” rating from Morgan Stanley (MS) analyst Craig Hettenbach. Earlier in June, Oppenheimer reiterated its “buy” rating on Broadcom.

In its research report, Bank of America also preferred a number of mobile, consumer, and cloud semiconductor stocks, including Intel (INTC), Broadcom, and NVIDIA.

Broadcom reports better-than-expected earnings

The fiscal 2Q16 results of the industry’s biggest semiconductor merger were released earlier this year, and the earnings were better than expected. Broadcom (AVGO), the world’s largest communication semiconductor company, was formed from the merger of Avago and Broadcom.

AVGO released its fiscal 2Q16 earnings, and its revenues and profits were on the higher end of the guidance. The company’s stock rose by 5% a day after the earnings announcement.

Broadcom reported better-than-expected guidance for fiscal 3Q16 and fiscal 2016. This positive reporting came as a result of the company’s increased exposure to wired and wireless communications.

The Avago–Broadcom merger increased its exposure to wired infrastructure, as the graph above shows.

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