- With a dramatic end to the largest-ever tech deal, Broadcom (AVGO +2.7%) is back on the upswing today after analysts resume Buy ratings in a re-evaluation of prospects for the chipmaker.
- BofA Merrill Lynch resumed coverage as one of its top picks, pointing to factors including a diversified product portfolio, a sector-leading dividend yield and industry-topping operating margin of 48.9%, sustainable long-term organic sales, potential for 40% FCF and a still-discounted trade price. The firm has a $340 price target, implying 27% upside.
- Meanwhile, RBC's Amit Daryanani reiterates a top-pick stance on Broadcom, and says that the company's next acquisition may look more like its deal for Brocade Communications -- not a "classic" chip company but one fitting parameters like a gross margin over 50% and market cap of $10B-$120B, like Citrix (CTXS +0.5%), NetApp (NTAP -0.7%), Juniper Networks (JNPR +0.3%) or CA (CA -0.2%). (h/t Bloomberg)
- Deutsche Bank (DE:DBKGn) resumed coverage at Buy with a $325 price target; now the company can get back to a strategy of allocating cash between dividends and M&A, Ross Seymore says, expecting a mix shift toward dividends.
- Now read: The Broadcom Dividend Machine
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