Brean Capital Raises Price Target on Marvell Technology (MRVL) Following 3Q Beat
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Brean Capital reiterated a Buy rating on Marvell Technology (NASDAQ: MRVL), and raised the price target to $18.00 (from $16.00), following the company's 3Q earnings report. MRVL reported revenue of $654M versus Consensus estimates of $614M. Revenue growth in the quarter was driven by MRVL’s Storage segment, which grew 19% Q/Q due to improved demand for HDDs and an inventory replenishment in the PC supply chain. The company reported non-GAAP EPS of $0.20 versus Consensus of $0.13.
Analyst Mike Burton commented, "MRVL reported a beat & raise to the bottom line off of strong revenues in the Oct-Q and relatively in line top-line guidance (before discontinued ops). Oct-Q revenues showed upside on strength in the Storage segment, from the inventory replenishment in PCs, but is expected to slow in the Jan-Q. MRVL’s gross margins result and guidance provided the largest surprise to the upside with the Company guiding to 57.5% non-GAAP GMs in the Jan-Q and to get to the 58-60% range by the 2H of FY18 (CY17 equivalent). OPEX cuts have also delivered operating leverage but many of the cuts should start to positively impact the P&L in the 1H of CY17. MRVL also announced a $1 billion buyback and an increase to the dividend. We reiterate our Buy rating and increase our target price from $16 to $18 off our raised estimates."
Shares of Marvell closed at $13.36 yesterday.
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