Broadcom May Have Reached Potential, Says Canaccord

Canaccord issued a report on Broadcom Corporation (NASDAQ: BRCM) on Thursday, downgrading the semiconductor company from Buy to Hold due to limited upside potential; the firm has a one-year price target of $47.

Analysts Matthew Ramsay and Steven Lee wrote, "We maintain our belief Broadcom is well positioned for steady long-term mid-to-high single digit growth in its core Broadband & Connectivity and Infrastructure and Networking businesses now clear of the wireless baseband headwinds. With solid core business fundamentals, a recent $1B addition to the buyback authorization, a 17% increase to the dividend, and a new focus to lower the diluted share count, we continue to see the potential for gradual stock appreciation with the broader semiconductor sector."

Broadcom's Infrastructure and Networking group is expected to grow by 10 percent due to strong data center switching demand to support increased smartphone and video data traffic demands. However, the power of larger customers such as Apple Inc. (NASDAQ: AAPL) could limit long-term growth potential.

Shares of Broadcom closed on Thursday at $44.72.