Stocks

Broadcom (NASDAQ:AVGO) Trading 0.5% Higher - What's Next?

Published October 19, 2024

On Friday, shares of Broadcom Inc. (NASDAQ:AVGO) saw a modest increase, trading up by 0.5%. The stock peaked at $182.71 before settling at $182.39. During the trading day, a total of 4,756,222 shares changed hands, indicating a significant drop of 84% in volume compared to the average trading volume of 30,601,725 shares. Previously, the stock had closed at $181.53.

Changes in Analyst Ratings

Broadcom's Targeted Upside Continues to Improve

Recent reports from various research analysts highlight the evolving outlook for Broadcom shares. Oppenheimer adjusted its target price, reducing it from $2,000.00 to $200.00 while maintaining an "outperform" rating in a report dated July 16. Meanwhile, JPMorgan Chase & Co. raised their target price from $200.00 to $210.00, assigning the stock an "overweight" rating on September 6. Similarly, Morgan Stanley increased their price target from $176.00 to $180.00 with an "overweight" rating. Rosenblatt Securities adjusted their target down from $2,400.00 to $240.00 but retained a "buy" rating. Additionally, Bank of America reiterated a "buy" rating, raising their price target to $215.00 from $200.00. Analyses reveal that two analysts rate the stock as a hold, twenty-four recommend buying, and one gives a strong buy, yielding a consensus rating of "Moderate Buy" with a price target set at $191.54, according to MarketBeat data.

Review Our Latest Research Report on AVGO

Performance of Broadcom

Top 4 ETFs to Leverage the Semiconductor Market Growth

Broadcom's current financial overview shows a current ratio of 1.04, a quick ratio of 0.94, and a debt-to-equity ratio of 1.02. The company has established a fifty-day moving average at $165.88 and a two-hundred-day average at $152.92. Broadcom’s market capitalization stands at approximately $835.55 billion, with a PE ratio of 7.84 and a PEG ratio of 2.99. Notably, the stock has a beta of 1.17, indicating slightly higher volatility in relation to the market.

The latest quarterly earnings report was issued on September 5, revealing earnings per share (EPS) of $1.24, which exceeded the consensus estimate of $1.20 by $0.04. In terms of revenue, Broadcom reported $13.07 billion, surpassing expectations of $12.98 billion. The company demonstrated a net margin of 10.88% and a return on equity at 30.12%. The year-over-year revenue growth was a remarkable 47.3%, compared to $0.95 EPS during the same period last year. Analysts project an EPS of 3.78 for Broadcom Inc. for the current fiscal year.

Dividend Increase

3 Chip Stocks Offering Attractive Dividends

Recently, Broadcom declared an increase in its quarterly dividend, which was disbursed on September 30. Shareholders on record as of September 19 received a dividend of $0.53 per share, which reflects a positive adjustment from the previously disbursed dividend of $0.53. The ex-dividend date was also marked on September 19. The annualized dividend payment amounts to $2.12, resulting in a dividend yield of 1.18%. Notably, the company's payout ratio is currently at 9.12%.

Insider Transactions

In related developments, Director Gayla J. Delly sold 750 shares of Broadcom stock on September 25, at an average price of $174.53, totaling $130,897.50. Following this transaction, Delly remains the owner of 34,750 shares valued at approximately $6,064,917.50. This transaction represented no change in her percentage of ownership. This sale was promptly disclosed in official filings with the Securities and Exchange Commission.

Moreover, CEO Hock E. Tan offloaded 50,000 shares on September 17, obtaining an average price of $163.37, amounting to $8,168,500.00. As a result of this transaction, he now holds 1,331,910 shares in the company, valued at $217,594,136.70, which is also a negligible change in his ownership. Concerns regarding insider sales have arisen as a total of 311,080 shares worth $53,540,590 have been sold over the past three months. Company insiders currently own 2.00% of Broadcom's stock.

Hedge Fund Activity

Several significant investors have recently adjusted their holdings in Broadcom. Legend Financial Advisors Inc. increased its position by 72.7% in the first quarter. They now own 19 shares worth approximately $25,000 after purchasing 8 additional shares. Richardson Capital Management LLC also initiated a new position valued at $29,000 during this same period. Delta Asset Management LLC TN raised its stake by 242.9%, acquiring an additional 17 shares to own a total of 24 shares now valued at $32,000. Redmont Wealth Advisors LLC founded a new stake worth $36,000 in Broadcom during the first quarter. Lastly, Tsfg LLC elevated its holdings dramatically by 1,073.7% in the third quarter, now owning 223 shares valued at around $38,000. Overall, institutional investors hold 76.43% of Broadcom's stock.

About Broadcom

Broadcom Inc. specializes in the design, development, and supply of a variety of semiconductor devices. The company focuses on complex digital and mixed-signal complementary metal oxide semiconductor (CMOS) based devices, as well as analog III-V based products. Broadcom functions through two primary segments: Semiconductor Solutions and Infrastructure Software.

Investment Considerations in Broadcom

Before making any investment decisions regarding Broadcom, it's advisable to examine recent insights and opinions from top analysts. Current evaluations rank Broadcom as a "Buy" yet alternatives might present better investment opportunities. Analysts have pinpointed five other stocks they regard as favorable opportunities before market awareness shifts.

Explore The Five Recommended Stocks Here

Broadcom, Investing, Stocks