Robertson Stephens downgraded Broadcom (BRCM ) to market perform from long-term attractive
Analyst Arun Veerappan says the preannouncement confirmed his belief that business conditions were weak. He notes the company cited widespread weakness in demand and the loss of a contract from 3COM. Broadcom also said that it had very poor visibility into future quarters.
Veerappan says that while the stock is down significantly, he thinks the fundamentals (core business of cable modems and set-top box chips) have deteriorated more significantly than the company has indicated, which could lead to further weakness in shares.