CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We keep our 12-month target at $1,100 on a P/E of 18.9x our CY 25 EPS view, above historical given increasing recurring software revenue post-VMware (40% sales software) and margin upside. We maintain our FY 24 (Oct.) EPS at $49.16 and FY 25 at $56.90. AVGO posts Oct-Q EPS of $11.06 vs. $10.45, beating the $10.96 consensus. Sales rose 4%, near expectations, with infrastructure software +7% and semiconductor solutions +3%. On the semiconductor side, we see growth being driven by networking (42% of semi sales and up 23% in Oct-Q; seen +30% in FY 24) given robust demand for custom AI accelerators as well as for switches/routers (AI to comprise over 25% of semi sales in FY 24, up from 15% in FY 23). We see significant cost synergies ahead, with VMware spending declining 40% exiting FY 24 and supporting segment EBITDA margin expansion (65% margin exiting FY 24), while we like greater emphasis on subscriptions and away from licensing. We positively view FCF potential (51% of sales) and announced 14% dividend hike.