Zacks Investment Research downgraded shares of Broadcom Corporation (BRCM) from OUTPERFORM to NEUTRAL on October 27, 2014, with a target price of $42.00.
Broadcom reported strong third-quarter 2014 results as adjusted earnings comfortably beat the Zacks Consensus Estimate. The company is well-positioned in the fast-growing wired and wireless communications markets, with cutting-edge solutions for an increased number of connected users that require more content and bandwidth. Broadcom is also executing the wind-down of its cellular base-band business for a renewed focus on the Broadband, Connectivity and Infrastructure markets. Broadcom's product leadership, solid financial performance and strong cash flow generation remain positives. However, we are concerned about margin pressure due to the accelerated new product ramp up and concentration risks. We are changing our long-term recommendation for the stock from Outperform to Neutral as we expect it to perform in line with the broader market.
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