Broadcom gains on Oppenheimer upgrade

Citing the margin and cash flow benefits that will come from its planned baseband processor exit, Oppeheimer has upgraded Broadcom (BRCM +1.5%) to Outperform, and set a $45 PT.

Broadcom is up 20% since announcing on June 2 it's exploring a sale or wind-down for its money-losing baseband ops, which had only a 4% share in 2013 thanks to tough competition from Qualcomm/MediaTek.

Street commentary on the move has generally been positive, though some concerns exist about its impact on Broadcom's Wi-Fi/Bluetooth combo chip sales. Digitimes has reported the Chinese government could acquire in Broadcom's baseband unit in an attempt to lower the dependence of local OEMs on Qualcomm and other foreign suppliers.

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