Marvell (MRVL) PT Trimmed to $14 at Nomura Amid Mobile Restructuring
Nomura Securities analyst Sanjay Chaurasia reiterated a Buy rating and lowered his price target on Marvell (NASDAQ: MRVL) to $14.00 (from $16.00) amid the announced mobile restructuring.
Chaurasia commented, "Mobile restructuring removed a substantial drag. But due to lack of a clear growth strategy post-exit, we see Marvell as under pressure to pursue a path of inorganic growth or to consider additional alternatives. Marvell announced the restructuring of its mobile business after the close today. Marvell is winding down its mobile SoC business in this restructuring, but is keeping the core LTE modem team for automotive and IoT connectivity applications. The company expects to save $170-220m in operating expenses (incl. ESO) on an annualized basis and expects to complete the restructuring by the end of FY16. Within networking, we think Marvell will focus on strengthening its service provider switching and NPU business going forward. We are forecasting $2.8b (flat yoy) in revenues and $0.70 ($0.50 incl ESO) in EPS for CY16, based on 2% growth in storage. We maintain our Buy rating. CY15E EPS at $0.31; CY16E EPS at $0.42."
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Shares of Marvell closed at $9.03 yesterday.