Shares of semiconductor firm Broadcom (NASDAQ:AVGO) gained in today’s trading as investors await its Q2 earnings results on June 12 after the market closes. Analysts are expecting earnings per share to come in at $10.85 on revenue of $12.01 billion. This equates to 5.14% and 38.6% year-over-year increases, respectively, according to TipRanks’ data.
Ideally, earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. Nevertheless, it’s worth noting that Broadcom has beaten earnings estimates every quarter since its 2020 Q3.
Options Traders Anticipate a Fairly Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a fairly large 6.25% move in either direction.
Is AVGO Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 20 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 72% rally in its share price over the past year, the average AVGO price target of $1,589.71 per share implies 10.36% upside potential.
