(Bloomberg) -- Broadcom Inc. shares tumbled on Friday after the chipmaker cut its full-year sales outlook, citing the impact of the trade war between China and the U.S.

While the weaker guidance didn’t come as a shock, the scale of the reduction caught some analysts off guard, and it was seen as further diminishing the idea that semiconductor demand would rebound in the second half of the year.

Several sell-side firms cut their price targets following Broadcom’s results and outlook late Thursday. But most still found some positive takeaways in the company’s valuation or its profit margins. “We don’t believe the sky is falling,” Barclays wrote, pointing to the company’s capital-return program. Citi’s report was entitled, “Here’s the bottom and it ain’t that bad.”

The stock sank as much as 8.6%, its biggest intraday percentage decline since January.

Here’s what analysts are saying about the results:

Piper Jaffray, Harsh Kumar

“Broadcom is throwing out the entire kitchen with the kitchen sink with its new guidance,” which seems “excessively conservative.”

While the company’s exposure to Huawei was well known, “we were a bit surprised to see slower demand due to broader macro uncertainty.”

Affirmed overweight rating and $305 price target.

Citi, Christopher Danely

“Here’s the bottom and it ain’t that bad.”

Lowers price target to $300 from $320 but affirms buy rating “as we believe EPS is close to a bottom and due to valuation”, as it is trading below the multiple of its peers.

Morgan Stanley, Craig Hettenbach

“The negative outlook is above and beyond the impact that had been expected from Huawei,” and this should quiet calls that the industry will see a “snapback” in the second half of the year.

The fact that customers are becoming cautious on demand and looking to reduce inventory because of intensified trade rhetoric “is a development to watch.”

While negative on Broadcom’s business in the near term, the forward outlook is “balanced by the company’s industry leading margins.”

Equal-weight rating, price target $250 from $262.

Jefferies, Mark Lipacis

Despite near-term risks related to trade, “longer term, our base case assumes the trade conflict resolves, or demand for Huawei equipment translates to other [original equipment manufacturers], aggregate semiconductor demand returns to normal growth and semis benefit from an inventory restock before the end of the year.”

Broadcom’s current valuation is “attractive.”

Rated buy, price target $324 from $370.

Barclays, Blayne Curtis

The lower outlook “is a bigger revision than what was expected but we don’t believe the sky is falling and we still think the strong capital return story keeps a bottom in the stock.”

Hopefully the outlook for the second half of the year “proves conservative should the trade tensions resolve.”

Rated overweight. Price target $315 from $360.

What Bloomberg Intelligence Says

“Broadcom’s weakened guidance dampens the chipmaker bull case of a strong 2H demand rebound and a recovery across the sector.”-- Anand Srinivasan, senior semiconductor analyst-- Click here for the research

(Updates shares in fourth paragraph, adds Piper commentary.)

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm, Scott Schnipper

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