Susquehanna Strong Believers in Broadcom Ability to Outperform Large-Cap Peers
2022.08.30 22:18
Ahead of Broadcom’s (NASDAQ:AVGO) earnings release after the close on Thursday, September 1, a Susquehanna analyst said in a note to clients that they expect results and guidance to be solidly in line or a bit ahead.
The analyst, who has a Positive rating and $680 price target on the stock, explained that Broadcom has limited exposure to PC/Handset (non-Apple)/Consumer markets, while networking read-throughs suggest continued strength in cloud and data center as Arista (NYSE:ANET) and Cisco (NASDAQ:CSCO) posted stronger results amid constraints.
In addition, for Broadband, “set-top box checks were mixed as CommScope’s Home Network business missed Street expectations on limited chip supply,” while wireless read-throughs were “somewhat mixed as Samsung (KS:005930) continues to burn through inventory, and Apple (NASDAQ:AAPL) posted slightly better results, but guided slightly worse as macro weighs.”
“We expect strength in Networking, Software and Data Center to overcome potential weakness in Broadband and Wireless,” added the analyst. “We continue to be strong believers in AVGO’s franchise businesses, capital allocation and integration strategy (with VMWare the next in line), and their ability to outperform many large-cap peers.”
