Jefferies Lowers Numbers on Cavium Networks (CAVM) After Q4 Warning

Jefferies lowered estimates on Cavium Networks (NASDAQ: CAVM) following lower Q4 revenue guidance from the company, but kept its Hold rating and $32 price target.

The firm notes Cavium lowered its Q4 revenue guidance by 760 bps QoQ, driven by a combination of weaker demand and supply chain inventory adjustments.

"Our analysis suggests the supply chain is depleting inventories in Q4, for the third consecutive quarter, and at a P/E of 25x, we believe CAVM is partially baking in upside potential from 1H12 restocking."

Q4 EPS estimates were cut from $0.19 to $0.12, FY11 from $1.12 to $1.05 and FY12 from $1.00 to $0.95.

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 $28.48 yesterday.

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