Marvell: Color on Quarter
- Needham raises their MRVL tgt to $27 from $25. MRVL reported F3Q18 results in line with its positive pre-announcement reflecting strength in its core business, particularly in Connectivity. F4Q18 guidance exceeded expectations on strength in Networking and Connectivity. They are encouraged by the better than expected results in the Connectivity segment, the new product driven re-acceleration of Networking revenue growth and the clearance of excess inventory in the HDD channel. Additionally, the co's cash generation and cash return to shareholders remain impressive. They remain positive on MRVL as the core business continues to outperform expectations and as the Cavium acquisition should prove highly accretive.
- Cowen notes that, with another excellent Q, a bullish C2018 Networking outlook and some hand-holding on growth opportunities within Connectivity, this was another great quarter without question. There is not much here to dislike, but investors continue to underestimate MRVL's organic growth potential. See estimates moving higher that should provide a financial "bridge" ahead of the highly synergistic CAVM deal.
- B. Riley FBR raises tgt to $29 from $27. They note MRVL's F3Q18 results exceeded the Street as signaled with 11/20's positive pre, but with better margin and EPS quality than we expected. Ahead, new Networking products drive surprising F4Q outlook upside to the Street and their estimates, even as mix-related margin momentum persists. Shares added 2% AMC despite a +27% MTD gain. Yet again, they believe takeaways skew favorably.
- Stifel raises tgt to $19 from $16. They note Marvell turned in another solid quarter with revenue slightly beating estimates combined with gross margins and expense control led to a beat on the bottom line. The 14 week 4QFY18 guidance provided more of the same. Slight beat on top and bottom line. They continue to be impressed with the mgmt team's execution to their strategy for margin expansion over revenue growth to return value to investors.
- Jefferies tgt to $28
- Loop Capital tgt to $28
- Morgan Stanley to $20.50