RBC Capital Upgrades Marvell (MRVL) to Outperform, Poised for Multiple Expansion
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Price: $11.43 +1.15%
Rating Summary:
11 Buy, 22 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Rating Summary:
11 Buy, 22 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
Trade MRVL Now!
RBC Capital upgraded Marvell (NASDAQ: MRVL) from Sector Perform to Outperform with a price target of $13.00 (from $9.00).
The firm said at 12.1x 2014 consensus P/E versus peers at 14.0x, or 8.6x ex-cash, valuation is compelling. Analyst Doug Freedman said sentiment and structural challenges are positioned to alleviate/improve, thus driving multiple expansion. He also said FCF growth is under-appreciated even with the assumption of limited pick-up in Mobile & Wireless.
"Our thesis should be viewed as a call option on executing to its plan in wireless, which is not in our numbers. Raising multiple to 9.5x (vs. prior 8x and 2-year average of 10.3x) which reflects reduced risk to EPS given upcoming trough," Freedman comments.
The firm cut April quarter EPS estimates from $0.15 to $0.13, reflecting HDD TAM reduction and softer end-markets, while raising FY13 EPS from $0.72 to $0.74 as they expect a stronger snap-back to revenues post-AprQ.
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 $9.28 yesterday, with a 52 week range of $6.98-$16.78.
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The firm said at 12.1x 2014 consensus P/E versus peers at 14.0x, or 8.6x ex-cash, valuation is compelling. Analyst Doug Freedman said sentiment and structural challenges are positioned to alleviate/improve, thus driving multiple expansion. He also said FCF growth is under-appreciated even with the assumption of limited pick-up in Mobile & Wireless.
"Our thesis should be viewed as a call option on executing to its plan in wireless, which is not in our numbers. Raising multiple to 9.5x (vs. prior 8x and 2-year average of 10.3x) which reflects reduced risk to EPS given upcoming trough," Freedman comments.
The firm cut April quarter EPS estimates from $0.15 to $0.13, reflecting HDD TAM reduction and softer end-markets, while raising FY13 EPS from $0.72 to $0.74 as they expect a stronger snap-back to revenues post-AprQ.
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 $9.28 yesterday, with a 52 week range of $6.98-$16.78.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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