Broadcom (NASDAQ:AVGO) Sees 1.1% Decline After Analyst Downgrade

Broadcom Inc. (NASDAQ:AVGO) experienced a 1.1% drop during trading on Wednesday. This decline followed a price target reduction by Morgan Stanley, which lowered its target from $265.00 to $246.00. Despite this, Morgan Stanley maintains an overweight rating on the stock. During the trading session, Broadcom reached a low of $203.85 and closed at $205.12. In total, 10,672,787 shares changed hands, representing a 64% decrease compared to the average trading volume of 29,528,203 shares. The previous day's closing price was $207.36.

Analyst Opinions on Broadcom

Broadcom has been widely discussed among analysts. On December 13th, Deutsche Bank Aktiengesellschaft raised its price target for Broadcom from $190.00 to $240.00, giving the company a "buy" rating. Barclays also increased its target from $205.00 to $260.00, reaffirming an "overweight" rating on January 17th. Bank of America updated its price objective from $215.00 to $250.00, also issuing a "buy" rating on December 13th. Cantor Fitzgerald raised its target from $200.00 to $225.00 with an "overweight" rating on October 8th. Robert W. Baird also raised its target from $195.00 to $210.00, issuing an "outperform" rating on December 13th. Overall, three analysts have a hold rating, while 24 have rated the stock as a buy. According to MarketBeat.com, Broadcom has an average rating of "Moderate Buy" with an average price target of $225.04.

Insider Trading Activities

In related developments, on January 8th, Director Eddy W. Hartenstein sold 4,000 shares of Broadcom at an average price of $229.64, totaling approximately $918,560. Following this sale, Hartenstein now owns around 46,400 shares, valued at about $10,655,296, indicating a 7.94% decrease in his holdings. Similarly, Director Check Kian Low sold 48,000 shares on January 6th for an average price of $235.35, with a total of about $11,296,800, representing a 29.80% decrease in his stake. In the last ninety days, insiders sold a total of 191,278 shares worth approximately $44,964,800. Notably, company insiders own about 2.00% of Broadcom's stock.

Institutional Investments

Multiple institutional investors have recently adjusted their positions in Broadcom. NCP Inc. increased its holdings by 615.4% during the second quarter, now owning 465 shares worth $747,000 after buying 400 additional shares. Point72 Asia Singapore Pte. Ltd. raised its stake by 257.1%, owning 12,167 shares valued at $19,535,000 after an additional purchase of 8,760 shares. Pathway Financial Advisers LLC increased its holdings by 2.0%, owning 4,666 shares worth $7,280,000 after acquiring 91 more shares. IMS Capital Management saw a 999.2% increase in its stake, now owning 6,650 shares worth $10,677,000 after acquiring an additional 6,045 shares. Furthermore, Ted Buchan & Co purchased a new stake worth about $1,700,000. In summary, 76.43% of Broadcom's stock is held by hedge funds and other institutional investors.

Current Market Position

Broadcom's stock is currently averaging $210.37 over the last 50 days and $181.05 over the last 200 days. The firm has a market capitalization of $961.76 billion, a price-to-earnings (P/E) ratio of 167.31, and a P/E to growth (P/E/G) ratio of 2.52. The company's current ratio stands at 1.17, its quick ratio is 1.07, and it has a debt-to-equity ratio of 0.98.

Recent Earnings Report

Broadcom recently reported quarterly earnings on December 12th. The semiconductor manufacturer reported $1.42 earnings per share (EPS), exceeding the consensus forecast of $1.39 by $0.03. The total revenue recorded for the quarter was $14.05 billion, slightly below the analyst expectations of $14.07 billion. The company posted a net margin of 11.43% and a return on equity of 28.00%, with a revenue increase of 51.2% compared to the same quarter last year. During the same period in the previous year, Broadcom recorded $0.98 EPS. Analysts now expect the company to achieve an EPS of 5.38 for the current year.

Dividend Increase

Additionally, Broadcom disclosed a quarterly dividend of $0.59 per share, paid on December 31st to investors who were on record as of December 23rd. The ex-dividend date was also December 23rd. This increase from the previous quarter's dividend of $0.53 signifies an annualized total dividend of $2.36, yielding 1.15%. The dividend payout ratio (DPR) is currently 192.50%.

Company Overview

Broadcom Inc. designs, develops, and supplies a wide range of semiconductor devices with a focus on complex digital and mixed-signal complementary metal oxide semiconductor (CMOS) devices and analog III-V products, serving customers worldwide. The company operates in two main sectors: Semiconductor Solutions and Infrastructure Software.

Broadcom, Stock, Decline