Broadcom (NASDAQ:AVGO) saw its shares jump by almost 10% at the time of writing, energized by Citi’s Buy rating and price target of $1,100. Citi’s thumbs-up is due to Broadcom’s solid core business performance and the expected benefits from its recent VMware acquisition.
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Citi analysts, led by Christopher Danely, are particularly bullish about Broadcom’s future in AI infrastructure. They predict sales in this area to double from $4B in Fiscal Year 2023 to over $8B in Fiscal Year 2024, compensating for any downturn in the semiconductor sector.
As for the $69B VMware deal, Citi’s team believes this acquisition could add a whopping $12.50 to Broadcom’s Fiscal 2025 EPS. This equates to a 34% increase.
Looking ahead, Citi envisions Broadcom achieving peak earnings per share of $60.00, driven by gross margins of 78% and operating margins of 58%.
What is the Price Target for AVGO?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 91% rally in its share price over the past year, the average AVGO price target of $1,065.36 per share implies only 2.9% upside potential.
