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Broadcom Stock Price Is Set to Breach $300 Mark

Broadcom (NASDAQ: AVGO) stock price has breached $300 mark twice in fiscal 2019. However, it fails in sustaining the upside momentum. Its shares are currently trading in the range of $280 – with a 52-week trading range of $208.23 – $323.20.

Market pundits, on the other hand, are bullish about the future fundamentals of Broadcom. Jefferies analyst Mark Lipacis has set Broadcom stock price target at $324. The firm expects its free cash flows to hit $10.9B for this year. In addition, the analyst expects a divided boost of 30% this year. RBC Capital Markets expects Broadcom stock price to reach $320 in the days to come.

AVGO Broadcom Inc. daily Stock Chart

Broadcom has generated solid financial results for the second quarter despite challenges related to restrictions on China. The company’s revenue of $5.5 billion increased 10% from the previous year period.

In addition to double-digit revenue growth, it has generated record cash flows in the second quarter. The company’s free cash flows were standing close to $2.5 billion in Q2, up 20% from the previous year period.

Tom Krause, CFO of Broadcom Inc said, “Despite the challenging market backdrop and updated revenue outlook, we still expect to grow free cash flow by a double-digit percentage for the year. In addition, we remain focused on completing a total of $8 billion of share repurchases and eliminations in fiscal 2019.”

Its focus on reducing outstanding shares would offer substantial support to share price and dividends.

Moreover, the company has also been investing aggressively in growth opportunities. It confirmed Symantec’s (NASDAQ: SYMC) enterprise security business acquisition for $10.7B in cash. It had also recently acquired Brocade and CA.

The management expects Symantec’s enterprise security business to generate more than $2B in sustainable, incremental run-rate revenues. They also expect to drive $1.3B in pro forma EBITDA along with $1B in run-rate cost synergies over the next 12 months. Overall, Broadcom stock price is well set to create a bullish trend in the days to come.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.