What to Watch When Broadcom Reports Earnings

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Broadcom Inc. (NASDAQ: AVGO) is reporting its fiscal first-quarter earnings results after the markets close on Thursday. The consensus estimates call for $5.23 in earnings per share (EPS) and $5.82 billion in revenue. In the same period of last year, it said it had $5.12 in EPS and $5.33 billion in revenue.

This stock has not kept pace with the broad markets in 2019, despite being a figurehead in the tech sector, much less semiconductors. Broadcom has underperformed the markets, with its stock up nearly 7% year to date. In the past 52 weeks, the stock is up about 3%.

Top Wall Street analysts like Broadcom’s leadership in mobile, data center and broadband markets, and especially in the radio frequency arena. Many on Wall Street see a cyclical rebound in industrial and communications demand, and Jefferies said this:

After being one of the best-performing stocks over the previous three years, Broadcom declined by 22% peak-to-trough in 2018, as its blocked bid for QUALCOMM and recent acquisition of CA technologies caused uncertainty about the company’s strategic direction. The analyst likes the CA acquisition and believes the software capability will give the company the opportunity to sell chips and software directly to Fortune 500 companies, and position them as more strategic suppliers.

A few other analysts weighed in on Broadcom ahead of the report:

  • Cowen has a Market Perform rating with a $280 price target.
  • Piper Jaffray has an Overweight rating with a $310 price target.
  • Morgan Stanley has an Equal Weight rating and a $261 target.
  • B. Riley has a Buy rating with a $310 price target.
  • Jefferies has a Buy rating too, with a $314 price target.

Shares of Broadcom were last seen trading at $270.89, in a 52-week range of $197.46 to $286.63. The stock consensus price target is $293.23.

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