Nomura Securities Maintains a 'Reduce' on Marvell (MRVL); Remaining Cautious Despite Better HDD Volumes

Nomura Securities maintains a 'Reduce' on Marvell (NASDAQ: MRVL) price target of $13.00.

Analyst, Romit Shah, said, "LSI Corp. (NYSE: LSI)(not rated) raised its Q1 revenue guidance from $570mn to $605mn on better-than-expected strength in HDDs and upside from flash-based products...While the read-through to Marvell may seem positive, we believe that the strength is not indicative of better PC end demand. In addition, improving HDD volumes seem largely reflected in storage guidance of up 10-20% QoQ and consensus revenue growth of 11% in the July quarter. Furthermore, we think Marvell is likely losing share to LSI, given its customer mix (100% share at WD)."

"Most importantly, we remain cautious because we believe the long-term margin profile will deteriorate. The issue is product mix. We see an increasing mix of low-end handset revenue (40-45% gross margin vs. corporate average of 55%) driving margins into the 50-55% range."

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

Shares of Marvell closed at $15.48 yesterday.

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