Barclays Raise Cavium's Price Target, Shares Reach New High
In a report published Tuesday, Barclays analyst Blayne Curtis maintained an Overweight rating on Cavium (NASDAQ: CAVM) raised the price target from $45.00 to $65.00. The analyst reiterated Cavium as one of Barclays' top picks.
Curtis sees “significant upside potential” for earnings power with new products forecasted to exceed 10 percent of revenue, led by LiquidIO. Barclays noted LiquidIO has seen faster adoption at Amazon.com and is in trial with other Cloud customers. Although Fusion has “been largely forgotten” this year at $2-3 million, the analyst expects to see double digit growth in CY15.
Curtis added, “Finally, CAVM's 2/4 core low-end product has seen the fastest ramp to 50 design wins and is on track to take a piece of FSL's $500M+ business.”
Barclays expects Cavium to reveal its ARM Server strategy at COMPUTEX next week. The analyst commented, “We believe Thunder approaches the server opportunity from the dataplane side, offering faster throughputs (vs. pure processing power) given faster I/O and memory, higher core counts, and hardware acceleration (similar to LiquidIO).”
Shares of Cavium closed at $46.48 on Friday. The stock has traded as high as $49.28 on Tuesday, up 6.02 percent and hitting a new 52-week high.
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