Brean Capital Raises Price Target as Marvell Technology (MRVL) Announces Restructuring Actions
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Brean Capital reiterated a Buy rating on Marvell Technology (NASDAQ: MRVL), and raised the price target to $16.00 (from $15.00), following the company's announced restructuring actions. The actions are intended to refocus its research and development efforts in order to increase operational efficiency and improve profitability.
Analyst Mike Burton commented, "Yesterday after the market close, MRVL announced its plan to lower operating expenses to increase operational efficiency and improve future profitability by refocusing its research and development efforts. The company intends to do this by eliminating approximately 900 positions worldwide and divest non-strategic businesses, which when fully implemented (end of October 2017) will result in lower annual operating expenses from a current annualized run rate of $1.08 billion to the $820-840 million range. We are impressed by MRVL “following through” on its plans to drive returns to patient shareholders by cutting OPEX. We recently added MRVL to our top pick list for the December 2016 quarter as we believe MRVL is a good “special situations” stock for investors to have exposure to a company that is re-aligning its margin profile of its peers on a focused revenue base. We reiterate our Buy rating as we raise our estimates and increase our TP from $15 to $16 on shares of MRVL."
Shares of Marvell closed at $12.94 yesterday.
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