In a research report issued yesterday, Wells Fargo top analyst David Wong initiated coverage on shares of Broadcom Ltd (NASDAQ:AVGO) with a valuation range of $150-180. Broadcom shares are currently trading at $174.11, up $0.63 or 0.36%.
Wong noted, “We think that the company has many strengths, including clearly demonstrated expertise in making large accretive acquisitions, broad end markets and product lines, and some differentiated technology capabilities. However, we question whether an active acquisition strategy is sustainable for a company of Broadcom’s size. In our view, valuation is moderate to high for Broadcom Ltd.’s stock, which suggests to us that the many positives of the company are already reflected in its stock price. Our 2016E and 2017E EPS estimates are -$0.78 and $1.47, respectively. Please see our 27-page initiation report for more details and discussion.”
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst David Wong has a yearly average return of 19.5% and a 77% success rate. Wong is ranked #51 out of 4190 analysts.
Out of the 34 analysts polled by TipRanks, 32 rate Broadcom stock a Buy, while 2 rate the stock a Hold. With a return potential of 13.4%, the stock’s consensus target price stands at $196.83.