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Why Analysts Cut Their Price Targets for Broadcom


Jun. 16 2019, Updated 3:40 a.m. ET

Analysts’ recommendations

Of the 36 analysts covering Broadcom (AVGO), 26 recommend “buy,” ten recommend “hold,” and none recommend “sell.” Their target of $308.03 for the stock implies a 9.4% upside based on its June 13 closing price of $281.61.

Broadcom beat analysts’ earnings expectation but missed their revenue estimate in fiscal 2019’s second quarter. Its profit and revenue were boosted by its infrastructure software segment and CA Technologies acquisition. While its networking business performed well in the quarter, its semiconductor solutions business slowed due to softness in the wireless chip segment.

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Price targets slashed

As we’ve discussed, Broadcom stock fell more than 8% after market hours yesterday, and other chip and semiconductor stocks followed. Price targets for Broadcom stock were slashed after the company forecast weak revenue in the second half of its fiscal year:

  • Mizuho reduced it to $330 from $335.
  • Morgan Stanley reduced it to $250 from $262.
  • Jefferies reduced it to $324 from $370.
  • JPMorgan Chase reduced it to $350 from $365.
  • Cowen and Company reduced it to $265 from $280.

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