Broadcom stock poised to grow 40 percent: report

NEW YORK (Reuters) - Broadcom Corp (BRCM.O) stock could shoot up as much as 40 percent as the chip-maker grabs part of the "smartphone" market, according to an article in the August 18 edition of Barron's.

Broadcom, which makes chips for mobile phones, network equipment and consumer electronics, is emerging as an aggressive competitor in the market of "smartphones," or cell phones that let users browse the Web, check e-mail, watch videos, listen to music and make phone calls, said the article in the weekly financial publication.

"They are in the right markets with the right products," Cowen & Co analyst Daniel Berenbaum told Barron's. "You have to like that and you have to like a company that has executed so well."

Berenbaum, who rates the shares "outperform," expects 10 percent revenue growth in 2009 and 15 percent in 2010 and sees free cash flow reaching $1 billion or more by 2010, leading to investors likely willing to pay 25 times free cash flow per share, putting the stock at $37.75, or about 40 percent higher than current levels, Barron's said.

Broadcom shares closed Friday at $27.46 on the Nasdaq.

(Reporting by Sarah Coffey, editing by Maureen Bavdek)