Broadcom (AVGO) Receives Upgraded Price Target of $2,000 by Oppenheimer Analyst

Oppenheimer's Rick Schafer raised their price target on Broadcom (NASDAQ: AVGO) by 33.3% from $1,500 to $2,000 on 2024/06/13. The analyst maintained their Buy rating on the stock.

Broadcom reported its Q2 2024 earnings on 2024/06/12, and the results were deemed "upside" by Schafer. The management raised its AI-related guidance to over $11B this year, split 65/35 ASIC/networking. Additionally, the company revised its FY 2024 total revenue forecast to $51B.

In Q2 2024, Broadcom surpassed expectations with an EPS of $10.96, beating the Zacks Consensus Estimate of $10.79 and Q2 2023's $10.32 by 6.2%. The company also reported revenue of $12.49B, surpassing the Zacks Consensus Estimate by 3.71% and Q2 2023's $8.73B by a substantial 43%. Furthermore, Broadcom's EBITDA for the quarter reached $7.43B, marking a 30.7% year-over-year increase.

For FY 2024, management provided guidance for revenue of $51B and EBITDA of $31.1B. President & CEO Hock Tan highlighted the strong performance driven by AI demand and VMware. Revenue from AI products reached a record $3.1B during the quarter, while infrastructure software revenue accelerated due to increased adoption of the VMware software stack by enterprises building their own private clouds. Tan expressed confidence by raising the company's FY 2024 guidance for consolidated revenue to $51B and adjusted EBITDA to 61% of revenue. CFO Kirsten Spears also emphasized the positive growth, noting that consolidated revenue grew 43% year-over-year to $12.5B, and adjusted EBITDA increased 31% year-over-year to $7.4B.

In addition to Oppenheimer's rating update, other analysts also adjusted their price targets for AVGO on 2024/06/13. Wells Fargo's Aaron Rakers raised their price target by 18.9% from $1,430 to $1,700 while maintaining a Hold rating. Goldman Sachs' Toshiya Hari increased their price target by 19.4% from $1,550 to $1,850 and maintained a Strong Buy rating. JP Morgan's Harlan Sur raised their price target by 17.6% from $1,700 to $2,000 and also maintained a Strong Buy rating.

According to the latest data, 95.5% of top-rated analysts currently rate AVGO as a Strong Buy or Buy, with only 4.5% considering it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that AVGO's upcoming year will deliver earnings per share (EPS) of $30.81. This projection indicates a 28.5% increase on a year-over-year basis.

Following AVGO's Q2 2024 report, the stock price has experienced a 12.3% increase. Year-over-year, AVGO has risen by 97.3%, outpacing the S&P 500's 24.4% growth during the same period.

Oppenheimer analyst Rick Schafer, who provided the updated rating and price target, is highly regarded in the financial industry. They are ranked in the top 2% of Wall Street analysts by WallStreetZen, with an average return of 25.8% and a win rate of 68.8%. Schafer specializes in the Consumer Defensive, Financial Services, and Technology sectors.

Broadcom Inc. is a global semiconductor company that specializes in the design, development, and supply of various semiconductor devices. The company's focus lies in complex digital and mixed-signal complementary metal-oxide-semiconductor based devices and analog III-V based products. Broadcom operates in two segments: Semiconductor Solutions and Infrastructure Software. The range of products they offer includes set-top box system-on-chips (SoCs), wireless local area network access point SoCs, Ethernet switching and routing merchant silicon products, and more. The company's products find applications in enterprise and data center networking, home connectivity, broadband access, telecommunication equipment, smartphones, and electronic displays.

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