HSBC Upgrades Broadcom (NASDAQ:AVGO) to Buy

HSBC upgraded shares of Broadcom (NASDAQ:AVGO) from a hold rating to a buy rating in a report published on Tuesday morning, MarketBeat reports. The brokerage currently has $400.00 price objective on the semiconductor manufacturer’s stock.

Other analysts have also recently issued research reports about the stock. Evercore ISI reissued an “outperform” rating and set a $304.00 price target (up previously from $267.00) on shares of Broadcom in a research report on Friday, June 6th. Citigroup increased their price target on shares of Broadcom from $276.00 to $285.00 and gave the stock a “buy” rating in a research report on Monday, June 9th. Susquehanna upped their target price on shares of Broadcom from $280.00 to $300.00 and gave the stock a “positive” rating in a research note on Friday, June 6th. JPMorgan Chase & Co. upped their target price on shares of Broadcom from $250.00 to $325.00 and gave the stock an “overweight” rating in a research note on Friday, June 6th. Finally, UBS Group upped their target price on shares of Broadcom from $270.00 to $290.00 and gave the stock a “buy” rating in a research note on Friday, June 6th. Two equities research analysts have rated the stock with a hold rating, twenty-six have given a buy rating and two have issued a strong buy rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of “Buy” and a consensus price target of $281.25.

Broadcom Stock Up 2.1%

Shares of AVGO opened at $270.17 on Tuesday. The stock has a market capitalization of $1.27 trillion, a PE ratio of 101.19, a P/E/G ratio of 1.88 and a beta of 1.11. Broadcom has a 1 year low of $128.50 and a 1 year high of $271.67. The company has a debt-to-equity ratio of 0.89, a quick ratio of 0.98 and a current ratio of 1.08. The company’s 50-day simple moving average is $227.46 and its 200-day simple moving average is $214.61.

Broadcom (NASDAQ:AVGO) last issued its quarterly earnings results on Thursday, June 5th. The semiconductor manufacturer reported $1.58 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.57 by $0.01. The business had revenue of $15 billion for the quarter, compared to analysts’ expectations of $14.98 billion. Broadcom had a net margin of 22.64% and a return on equity of 35.49%. The business’s quarterly revenue was up 20.2% on a year-over-year basis. During the same quarter in the prior year, the company earned $10.96 earnings per share. Analysts forecast that Broadcom will post 5.38 earnings per share for the current fiscal year.

Broadcom Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, June 30th. Stockholders of record on Friday, June 20th will be issued a $0.59 dividend. This represents a $2.36 annualized dividend and a dividend yield of 0.87%. The ex-dividend date of this dividend is Friday, June 20th. Broadcom’s payout ratio is currently 88.39%.

Broadcom announced that its board has authorized a stock buyback plan on Monday, April 7th that permits the company to repurchase $10.00 billion in shares. This repurchase authorization permits the semiconductor manufacturer to purchase up to 1.4% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company’s management believes its shares are undervalued.

Insider Activity

In related news, Director Justine Page sold 800 shares of the stock in a transaction on Monday, April 14th. The stock was sold at an average price of $185.00, for a total transaction of $148,000.00. Following the completion of the sale, the director now directly owns 25,380 shares of the company’s stock, valued at $4,695,300. This trade represents a 3.06% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, CEO Hock E. Tan sold 117,758 shares of the stock in a transaction on Thursday, June 12th. The stock was sold at an average price of $252.91, for a total value of $29,782,175.78. Following the sale, the chief executive officer now directly owns 1,014,152 shares of the company’s stock, valued at approximately $256,489,182.32. This represents a 10.40% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last ninety days, insiders sold 337,818 shares of company stock valued at $84,167,415. 2.00% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Broadcom

Several hedge funds have recently modified their holdings of AVGO. Barnes Dennig Private Wealth Management LLC acquired a new stake in shares of Broadcom during the first quarter worth $25,000. Cheviot Value Management LLC acquired a new stake in Broadcom in the first quarter valued at $25,000. Canton Hathaway LLC acquired a new stake in Broadcom in the fourth quarter valued at $26,000. Rialto Wealth Management LLC acquired a new stake in Broadcom in the fourth quarter valued at $26,000. Finally, Inlight Wealth Management LLC acquired a new stake in Broadcom in the first quarter valued at $26,000. 76.43% of the stock is owned by institutional investors and hedge funds.

About Broadcom

Broadcom Inc designs, develops, and supplies various semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates in two segments, Semiconductor Solutions and Infrastructure Software.