Analysts Slash Broadcom Price Targets After Revenue Warning

AVGO is citing fallout from the U.S.-China trade war

Jun 14, 2019 at 10:19 AM
facebook twitter linkedin


Broadcom Inc (NASDAQ:AVGO) stock is taking a big hit post-earnings, with the Apple supplier recording fiscal second-quarter revenue of $5.52 billion, less than the $5.68 billion analysts were expecting. What's more, the chipmaker slashed its full-year revenue forecast, citing headwinds from the U.S.-China trade conflict, including export restrictions on Chinese telecom Huawei Technologies.

More specifically, Broadcom said it now expects 2019 revenue to arrive at $22.5 billion, $2 billion less than it previously forecast. In a conference call, CEO Hock Tan said in the short term, there will be a "very sharp impact" from the Huawei ban, which creates "uncertainty in our marketplace." AVGO received $900 million in revenue from Huawei last year.

A round of bearish brokerage attention is only turning up the heat on AVGO stock, with at least 10 price-target cuts coming down the pike. Morgan Stanley is one of the names that chimed in on Broadcom, lowering its price target to $250 from $262, and saying the "negative outlook is above and beyond the impact that had been expected from Huawei."

The post-earnings downside move for AVGO stock is rare -- and likely caught a number of options traders off guard. At last check, the tech shares were off 7.4% at $260.63, falling back below their 200-day moving average, which failed as support in late May. This follows the equity's swift rejection from its 80-day moving average on Tuesday, with Broadcom pacing for a 4.3% weekly drop.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners