UBS Maintains a 'Buy' on Cavium Networks (CAVM); Lower Estimates, PT on Softer Communication Equipment

UBS maintains a 'Buy' on Cavium Networks (NASDAQ: CAVM), price target lowered from $47.50 to $43.

UBS analyst says, "We are more cautious on Buy-rated Cavium based on read-throughs from: 1) comm equipment makers with slowness in Europe, Federal, 2) deceleration of Cavium bellwether, F5 (Cavium sales have tracked with 99% R2), 3) read-through from NetLogic (Cavium Enterprise/SP sales have tracked with 97% R2)."

"For Cavium’s 2Q11 results (02-Aug), we expect sales/non-GAAP EPS of $72.0m (+13% q/q)/$0.32, in line with consensus of $71.6m/$0.32. For 3Q, we lower sales/non-GAAP EPS by 4%/3% to $77.3m (+8% q/q)/$0.34 slightly above consensus of $76.5m/$0.33." (FY12 EPS estimate lowered from $1.07 to $0.90)

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

Shares of Cavium Networks closed at $34.42 yesterday.

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