Brean Capital Reiterates Buy on Cavium (CAVM) Following 2Q Earnings Results - PT to $57

Brean Capital maintained a Buy rating on Cavium Networks (NASDAQ: CAVM), and cut the price target to $57.00 (from $60.00), following the company's 2Q earnings report. CAVM reported revenues of $107.2M compared to the Street at $106.7M. Non-GAAP EPS of $0.29 was in-line with Street estimates.

Analyst Mike Burton commented, "CAVM reported slight upside to revenue and in-line EPS for its Jun-16Q as revenue was driven by growth in all of its major end markets. In terms of guidance, the company is seeing a general overall improvement in demand into the 2H of 2016 on both existing products and new products and guided Sep-16Q revenue and EPS above Consensus. CAVM has the potential to benefit from some strongest product and end market cycles, and as the company continues to execute on launching new products (e.g., OCTEON III and ThunderX) to fast growing end markets, we believe shares will benefit. In addition, we believe the recent acquisition of QLGC (expected to close in Sep-16Q) will only further the company’s hopes to be a diversified infrastructure IC provider as the initial feedback CAVM has received from QLGC’s customers has been very positive. We are tweaking our CY16 and CY17 EPS off this earnings call, and reiterating our Buy rating. Despite our slightly higher EPS, we are decreasing our target price from $60 to $57 to reflect the lowered earnings multiple."

For an analyst ratings summary and ratings history on Cavium Networks click here. For more ratings news on Cavium Networks click here.

Shares of Cavium Networks closed at $43.73 yesterday.

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