Deutsche Bank Raises Broadcom Price Target to $515
Deutsche Bank analyst Ross Seymore raised the price target on Broadcom Limited (NASDAQ: AVGO) to $515.00 (from $430.00) while maintaining a Buy rating.
“AVGO delivered a solid F2Q/3Q report/guide, but only reiterating long-term AI targets was somewhat disappointing.
To level set, FY27 AI revenues had been guided to “>$100b” and while CEO Hock Tan exhibited increased confidence in meeting/beating this target, he did not provide a higher target.
We view this lack of a positive revision is largely due to conservatism (not share loss, DC buildout delays etc.) and believe that AI revenues will likely exceed his original target (DBe $125b), and growth significantly in FY28 (DBe ~$190b).
While this revenue growth may be slightly GM dilutive, we believe it will be largely OM neutral.
Despite the lack of a LT guidance revision, we remain confident in AVGO’s leadership positions in XPUs and switching combining to deliver significant revenue/EPS growth going forward as the AI megatrend persists (our CY27E rev/EPS are rising by ~+15%).
Consequently, with our LT thesis unchanged, we view the messaging-related pullback in AVGO shares as a buying opportunity. Reiterate Buy rating and raise P/T to $515 (~23x CY27E EPS).”
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