Broadcom Inc. (NASDAQ:AVGO) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 4.0% to hit US$12b. Broadcom reported statutory earnings per share (EPS) US$4.42, which was a notable 11% above what the analysts had forecast. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Broadcom after the latest results.
Check out our latest analysis for Broadcom
After the latest results, the 37 analysts covering Broadcom are now predicting revenues of US$51.4b in 2024. If met, this would reflect a substantial 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to descend 11% to US$19.64 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$50.3b and earnings per share (EPS) of US$19.15 in 2024. It looks like there’s been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that the analysts have increased their price target for Broadcom 17% to US$1,790on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Broadcom, with the most bullish analyst valuing it at US$2,100 and the most bearish at US$1,051 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Broadcom’s growth to accelerate, with the forecast 45% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that Broadcom is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Broadcom following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Broadcom going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example – Broadcom has 4 warning signs we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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