Oppenheimer Maintains Outperform On Broadcom Following 3Q14 Results

In a research report issued Wednesday, Oppenheimer analyst Rick Schafer maintained an Outperform rating on Broadcom (NASDAQ:BRCM) with a $48 price target, following the company’s third-quarter results, posting EPS of $0.91 that topped consensus’ $0.84 estimate as ex-baseband cost savings tracked ahead of expectations.

Schafer noted, “Guidance of $2.08B was just below consensus’ $2.11B est. As previewed, Connectivity drove 3Q strength on the back of iPhone 6 content gains, while BRCM’s cash-cow Broadband business benefited from EM standards upgrades. GM of 55% was in line with expectations, despite a 70bps headwind from higher than expected Cellular baseband SoC revs. With $2.7B of domestic cash and over 50% of its $800M share repurchase remaining, we look to BRCM’s AD for material updates to capital allocation targets. An improving profitability profile post-baseband, and more favorable shareholder returns keep us buyers here with a $48 PT.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rick Schafer has a total average return of 7.3% and a 65.8% success rate. Schafer has a -0.2% average return when recommending BRCM, and is ranked #711 out of 3337 analysts.

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