CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Mobile

Broadcom gains on Lehman upgrade

A positive report by a Lehman Brothers analyst boosts shares in the communications chipmaker.

Certain sectors of the communications chip market will recover from inventory issues faster than others, a Lehman Brothers analyst said Friday, sending shares of Broadcom up in early morning trading.

In a research report issued this morning, Lehman analyst Arnab Chanda upgraded Broadcom and Marvell Technology from "market perform" to "buy" and raised his price target on Intersil from $25 to $45.

Broadcom was up $1.80 to $42.84 by market close. Marvell rose to $32.75 before falling to $29.90, down $1.22. Intersil gained 6 cents to $34.14.

The companies make integrated circuits for what's known as customer premise equipment (CPE), devices such as cable set-top boxes, cable modems, and local area network equipment.

Chanda said those companies will outperform integrated-circuit companies that supply the telecommunications market, which has been hit with declines in spending from most carriers.

Inventory issues have plagued both of those sectors, but Chanda said he sees signals that those issues are beginning to work themselves out in the CPE market.

Cisco, which recently wrote off $2.25 billion in equipment, saw the bulk of that write-off coming in products for carriers as opposed to corporations.

There have been signs of growth in the cable set-top box market, Chanda said.

"In addition, the valuations of the CPE players are lower on a (price to sales) basis with likely stable margins vs. higher valuations in the telecom players with pricing and margin deterioration likely," he wrote.