Broadcom (NASDAQ:AVGO) Stock Price Up 6.6% - Still a Buy?

Key Points

• Broadcom shares jumped 6.6% to $418.16 on heavy trading volume, moving above both its 50-day and 200-day moving averages.
• Analyst sentiment remains favorable, with 28 Buy ratings and four Holds producing a consensus “Moderate Buy” rating and an average price target of $493.24.
• Broadcom exceeded quarterly EPS and revenue estimates, with revenue up 47.9% year over year; however, the stock’s valuation is elevated at roughly 69.7 times earnings, while its dividend yield is only 0.6%.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) shares traded up 6.6% on Tuesday . The company traded as high as $422.07 and last traded at $418.16. 29,115,569 shares traded hands during mid-day trading, an increase of 14% from the average daily volume of 25,642,791 shares. The stock had previously closed at $392.23.

Analyst Upgrades and Downgrades

AVGO has been the topic of a number of research analyst reports. DA Davidson lifted their target price on Broadcom from $375.00 to $400.00 and gave the company a "neutral" rating in a report on Thursday, June 4th. Morgan Stanley set a $502.00 target price on shares of Broadcom and gave the stock an "overweight" rating in a research report on Thursday, June 4th. Erste Group Bank reissued a "hold" rating on shares of Broadcom in a research report on Tuesday, July 7th. Evercore restated an "outperform" rating and set a $582.00 target price on shares of Broadcom in a report on Tuesday, May 19th. Finally, KeyCorp reiterated an "overweight" rating and issued a $575.00 price target (up from $500.00) on shares of Broadcom in a report on Thursday, June 4th. Twenty-eight research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat.com, Broadcom has a consensus rating of "Moderate Buy" and an average target price of $493.24.

Broadcom Stock Performance

The company has a market capitalization of $1.99 trillion, a price-to-earnings ratio of 69.69, a price-to-earnings-growth ratio of 0.74 and a beta of 1.45. The company has a current ratio of 2.24, a quick ratio of 2.01 and a debt-to-equity ratio of 0.71. The stock has a 50-day simple moving average of $393.64 and a 200-day simple moving average of $368.48.

Broadcom (NASDAQ:AVGO - Get Free Report) last issued its quarterly earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.40 by $0.04. The business had revenue of $22.19 billion during the quarter, compared to analyst estimates of $22.13 billion. Broadcom had a net margin of 38.85% and a return on equity of 41.61%. The business's revenue was up 47.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $1.58 earnings per share. On average, analysts anticipate that Broadcom Inc. will post 10.24 earnings per share for the current year.

Broadcom Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Tuesday, June 30th. Investors of record on Monday, June 22nd were paid a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a yield of 0.6%. The ex-dividend date was Monday, June 22nd. Broadcom's dividend payout ratio (DPR) is 43.33%.

Insider Transactions at Broadcom

In other Broadcom news, Director Gayla J. Delly sold 1,890 shares of the company's stock in a transaction that occurred on Wednesday, July 8th. The stock was sold at an average price of $385.38, for a total transaction of $728,368.20. Following the sale, the director owned 31,326 shares in the company, valued at $12,072,413.88. This represents a 5.69% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. Also, insider Mark David Brazeal sold 25,000 shares of the stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $401.33, for a total value of $10,033,250.00. Following the transaction, the insider directly owned 194,989 shares in the company, valued at approximately $78,254,935.37. This represents a 11.36% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 61,644 shares of company stock valued at $24,016,214 in the last three months. Corporate insiders own 1.90% of the company's stock.

Institutional Trading of Broadcom

A number of institutional investors and hedge funds have recently modified their holdings of the business. Bank of America Corp DE increased its position in shares of Broadcom by 1.5% during the first quarter. Bank of America Corp DE now owns 58,737,097 shares of the semiconductor manufacturer's stock worth $18,179,719,000 after acquiring an additional 894,564 shares in the last quarter. Bartlett & CO. Wealth Management LLC lifted its position in Broadcom by 129.3% in the 1st quarter. Bartlett & CO. Wealth Management LLC now owns 110,048 shares of the semiconductor manufacturer's stock valued at $34,061,000 after acquiring an additional 62,050 shares in the last quarter. Sovran Advisors LLC lifted its position in Broadcom by 121.3% in the 4th quarter. Sovran Advisors LLC now owns 30,631 shares of the semiconductor manufacturer's stock valued at $10,507,000 after acquiring an additional 16,789 shares in the last quarter. Thurston Springer Miller Herd & Titak Inc. boosted its stake in Broadcom by 406.1% in the 4th quarter. Thurston Springer Miller Herd & Titak Inc. now owns 11,994 shares of the semiconductor manufacturer's stock worth $4,151,000 after purchasing an additional 9,624 shares during the period. Finally, Aspiriant LLC boosted its stake in Broadcom by 18.5% in the 4th quarter. Aspiriant LLC now owns 12,016 shares of the semiconductor manufacturer's stock worth $4,158,000 after purchasing an additional 1,872 shares during the period. 76.43% of the stock is owned by institutional investors and hedge funds.

Broadcom Company Profile

Broadcom Inc NASDAQ: AVGO is a global technology company that designs, develops and supplies semiconductor and infrastructure software solutions for a broad range of markets. The company's semiconductor business provides components and systems for wired and wireless communications, enterprise and cloud storage, networking and broadband access, serving original equipment manufacturers, cloud service providers, telecommunications carriers and industrial customers worldwide. Broadcom is headquartered in Irvine, California, and operates globally with research, development and sales organizations across North America, Europe and Asia.

On the semiconductor side, Broadcom's portfolio includes system-on-chip (SoC) and application-specific integrated circuit (ASIC) solutions, radio-frequency and connectivity components, Ethernet switching and PHY devices, storage adapters and controllers, optical transceivers and other networking silicon.

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