UPDATE: Credit Suisse Downgrades Marvell Technology Group to Neutral on Pre-Announcement

Credit Suisse reduced its rating on Marvell Technology Group

from Outperform to Neutral and lowered its price target from $18 to $8.50. Credit Suisse noted, "With/without CFO, top line challenges are unchanged - but sudden change in management increases uncertainty around strategic direction and we are less comfortable leaning on "cheap valuation" to support our rating - hence we are downgrading, albeit clearly late. We feel comfortable that structural positioning in Networking (22% of revs) is solid, and while HDD (~35% of revs) is not a growth segment, we think the long tail of CF is healthy. SSD mkt is still uncertain, and TD market feels most vulnerable - add it up, we feel comfortable with ~75% of the ~$600 m/yr. FCF on F3Q12E annualized basis (implied FCF yield 8.7%). We will stop here for fear of falling back into the value trap." Marvell Technology Group closed at $8.83 on Thursday.