Wedbush Cuts Price Target on Cavium Networks (CAVM), Lack of Visibility

Wedbush is reaffirming its Neutral rating on shares of Cavium Networks (NASDAQ: CAVM) and is lowering its price target from $27 to $24.

Management reported it has lowered its earnings and revenue expectations for the the fourth quarter as a result of weaker-than expected results across both its enterprise and service provider & broadband and consumer market segments.

The firm believes the company's strong pipeline will continue to drive growth through 2012 and well into 2013. Wedbush notes it is only on the sidelines with shares of CAVM until some demand trends for the first half of 2012 are slightly more visible.

An analyst at Wedbush comments, "Although Cavium noted in its press release that it believes in Q4, it under shipped demand, we remain cautious on 1H:12 following our bus tour in mid December."

For Q4 and FY11, the firm is reducing its EPS estimates from $0.19 and $1.12 to $0.12 and $1.05. Revenue estimates for Q4 and FY11 are now set at $61.8 million and $264.7 million.

The firm also cut its FY12 EPS and sales estimates from $1.15 and $295.3 million to $0.74 and $259.3 million.

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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