Broadcom Stock Retreats from Key Level After Revenue Miss

Analysts have been quick to respond to the earnings news

Managing Editor
Sep 13, 2019 at 10:15 AM
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Broadcom Inc (NASDAQ:AVGO) stock is moving lower this morning, down 4.6% at $286.62, at last check, as the company's fiscal third-quarter revenue miss offsets an adjusted earnings per share beat. Additionally, amid ongoing U.S.-China trade uncertainty and an overall slowdown in the chip sector, Broadcom CEO Hock Tan said, "There is not much clarity or visibility yet, or certainty that any sharp recovery is around the corner."

Analyst reaction has been mixed. While Loop Capital downgraded AVGO to "hold" from "buy," no fewer than seven price-target hikes have come through. Included in the bunch was one to $370 from $350 from Rosenblatt Securities -- a more than 23% premium to Thursday's close at $300.58 -- as well as one to $330 from $315 at Craig-Hallum, which said Apple's 5G phone could create "higher unit volumes/meaningful content growth" for Broadcom. Coming into today, 16 of the 21 covering firms sported a "buy" or better rating, with not a single "sell" on the books.

On the charts, Broadcom stock has struggled to maintain positive momentum over the past year, but in 2019,has managed to tack on 12.7%. The shares also recently gapped back above the 120-day moving average, but are seeing resistance at the round $300 level. 

Meanwhile, in the options pits, a put-heavy presence is evident on AVGO. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.06 ranks in the highest percentile of its annual range, suggesting a heavier-than-usual put-skew among near-term traders.

 

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