Auriga Resumes Coverage on Marvell (MRVL) at Buy; Attractive Valuation and Long Term Positioning Trumps Near/Mid Term Challenges

Auriga resumes coverage on Marvell (NASDAQ: MRVL) with a Buy. PT $18.

Auriga analyst says, "We resume coverage of Marvell as we see a combination of attractive valuation and strong long-term positioning offsetting near/mid-term secular and competitive challenges. Our analysis suggests that growth and margins maybe impacted in near/mid-term as the company grapples with slowdown/consolidation in hard disk drive (HDD) segment and market share losses at RIM (Nasdaq: RIMM)(NotRated). However, we expect O-phone and flash based growth opportunities to more than offset these headwinds. Longer term, we expect the company to grow at 8%-11% CAGR over five years; we expect growth to be driven by the strength of its new product offerings and also improving competitive positioning in networking/cellular segments. Even though our FY13 estimates are lower than consensus, we still view the stock as attractively valued for longer term oriented investors."

"Our FY12 estimates at $3.64bln/$1.52 are mostly in-line with consensus at $3.66bln/$1.52. Our FY13 estimates are slightly lower at $3.97bln/$1.66 versus consensus at $4.04bln/$1.69."

For more ratings news on Marvell click here and for the rating history of Marvell click here.

Shares of Marvell closed at $15.00 yesterday.

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