Canaccord analyst Michael Walkley weighed in today with a favorable report on Avago Technologies Ltd (NASDAQ:AVGO), reiterating a Buy rating on the stock, with a $165 price target, after the company released its fiscal third-quarter results, posting pro forma EPS of $2.24, above Walkley’s $2.13 estimates driven by strong margins and stable sales trends in all divisions.
Walkley wrote, “Following Q3 results and Q4 guidance, we raise our F2015 pro forma EPS estimate from $8.71 to $8.85. We are incorporating Broadcom estimates into our model starting Q2/F16 and assuming management achieves a $400M annual savings runrate exiting F2016. We raise F2016 pro forma EPS estimate from $10.92 to $10.96.”
“Management remains committed to the Broadcom acquisition and anticipated synergies. We believe the acquisition significantly expands Avago’s TAM and creates a leading global diversified semiconductor company with a broad portfolio of category-leading products and a leading customer base addressing the wireless and wired infrastructure, enterprise & data center networking and storage, IP traffic routing, Home/IoT and Industrial verticals,” the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst T. Michael Walkley has a total average return of 16.7% and a 57.0% success rate. Walkley has a 50.2% average return when recommending AVGO, and is ranked #21 out of 3734 analysts.
Out of the 19 analysts polled by TipRanks, 17 rate Avago Technologies stock a Buy, while 2 rate the stock a Hold. With a return potential of 18.9%, the stock’s consensus target price stands at $148.56.