Markets & Finance

Citigroup Lowers Broadcom to 'Sell'

Citigroup downgraded Broadcom (BRCM) to sell from hold.

Analyst Clark Westmont says the third quarter is strong, with sales up 12.6% sequentially, vs. his 10% estimate. The 14 cents pro forma earnings per share was one cents better than First Call's estimate and his estimates. He raised the 62 cents 2004 earnings per share estimate to 68 cents.

Westmont notes some of Broadcom's business units will likely slow seasonally in the first quarter. He says sequential sales growth momentum will likely be uneven, and relatively low, for most of 2004 -- a very different pattern than the strong double-digit sequential growth experienced in 2003. Due to high valuation, and a expected downshift in momentum, Westmont downgraded the stock, and is keeping his $28 target.

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