UPDATE: Stifel Downgrades Broadcom On Multiple Challenges Ahead

In a report published Tuesday, Stifel analyst Kevin Cassidy downgraded the rating on Broadcom (NASDAQ: BRCM) from Buy to Hold, and removed the $34.00 price target.

In the report, Stifel noted, “Yesterday before the market open Broadcom announced it is exploring strategic alternatives for its cellular baseband business, including a potential sale or wind-down, and hosted a conference call to provide additional detail. In our view, while this move may have been necessary to cut losses in the market, it may result in connectivity (Wi-Fi, Bluetooth, FM, GPS, NFC combination chips) market share losses to the remaining cellular baseband players that can also supply connectivity chips.

"We are reducing our revenue estimates, increasing our non-GAAP EPS estimates, increasing our 12-month fair value and downgrading the BRCM shares to Hold from Buy.”

Broadcom closed on Monday at $34.84.