Oppenheimer analyst Rick Schafer shared some insights on Avago Technologies Ltd (NASDAQ:AVGO), after sitting down with CEO Hock Tan, CFO Tony Maslowski, and Director of IR Asish Saran at the Avago company headquarters on Day 1 of the 13th Annual Semiconductor Bus Tour. The analyst maintained an Outperform rating on the stock, and no price target was provided.
Schafer observed, “We continue to like AVGO’s aggressive, yet disciplined, approach to M&A. Given mgmt’s track record of under-promising and over-delivering, we see upside to the initial $750M in AVGO/BRCM cost synergies. We believe the stickiness of BRCM’s wireless connectivity business has been a pleasant surprise for AVGO, and came away with the sense that it may be one of the franchises AVGO holds on to.”
Further, “We see sustained earnings momentum into 2016 driven by top-line growth/upside and below-the-line belt-tightening. We see combined AVGO/BRCM earnings power potentially eclipsing $12 in CY16 and would remain buyers here.”
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 28.1% and a 81.9% success rate. Schafer has a 79.2% average return when recommending AVGO, and is ranked #10 out of 3614 analysts.
Out of the 13 analysts polled by TipRanks, 12 rate Avago stock a Buy, while 1 rates the stock a Hold. With a return potential of 18.44%, the stock’s consensus target price stands at $163.42.