In addition to the strong sales performance, CFRA views Broadcom (NASDAQ:AVGO)'s recent 11% dividend increase positively. The firm anticipates a heightened focus on reducing debt, noting a $2.5 billion reduction in the October quarter, and on lowering interest expenses. With free cash flow (FCF) representing 39% of sales, CFRA foresees over $30 billion in FCF for Broadcom in fiscal year 2025.
According to InvestingPro, Broadcom has maintained dividend payments for 15 consecutive years, with a current dividend yield of 1.17%. The company's overall financial health score is rated as GREAT, supported by strong profitability and momentum metrics.
In addition to the strong sales performance, CFRA views Broadcom's recent 11% dividend increase positively. The firm anticipates a heightened focus on reducing debt, noting a $2.5 billion reduction in the October quarter, and on lowering interest expenses. With free cash flow (FCF) representing 39% of sales, CFRA foresees over $30 billion in FCF for Broadcom in fiscal year 2025.
Broadcom's stock has seen notable gains following what is perceived as a very bullish outlook for the company's AI revenue over the next three years. The optimism is largely attributed to Broadcom's custom silicon business, which is expected to grow at least three to four times within this period. The last twelve months' AI sales reached $12.2 billion, not including potential revenue from two new custom silicon customers. This growth is contrasted with mid-single-digit growth projections for non-AI semiconductor sales.
In other recent news, Broadcom Limited has been the focus of various financial firms who have raised their price targets citing the company's strong growth trajectory in the artificial intelligence (AI) sector. Analysts from TD (TSX:TD) Cowen, Piper Sandler, Cantor Fitzgerald, Baird, and Bernstein SocGen Group have all adjusted their targets upwards. The company's AI revenue reported a 220% annual increase, a key factor driving these adjustments.
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