FBR Capital Chimes In On Technology, Media, Telecom & Semiconductor Stocks Following CES 2015
2015 started off with a bang in Las Vegas for the International Consumer Electronics Show (CES). Analyst Christopher Rolland of FBR Capital Markets research group put together a report in light of the show, featuring the biggest and most impressive participants.
Highlights from his report include:
Marvell Technology Group Ltd. (NASDAQ: MRVL)
Christopher Rolland and FBR Capital guessed by Marvell’s tone that the semiconductor company “may enter the ARM-based server market, with an announcement relatively soon.”
ARM servers operate on many advanced RISC machine processors. Rolland noted that Marvell is “extremely optimistic” about its wireless business and would not comment on speculation that Marvell has Chinese bidders vying for the wireless segment of the business.
Marvell also vaguely alluded that it will release a “’game changing’ technology… in the next few months.”
Rolland reiterated a Market Perform on Marvell and raised the price target from $17 to $19.
He noted: “At CES last year, the company was extremely skeptical about the ARM-based server market. However this year, we noted a change in management’s tone; it seemed open to embracing the technology… We applaud Marvell’s early-mover success in Chinese LTE handsets but acknowledge increasing competition in that market over time.
"Additionally, we think the company’s strong market share gains in both HDDs and SSDs over the past two years will be difficult to replicate into 2015. At this time, we remain on the sidelines, but we could potentially look to be more constructive in 2015.”
Rolland has given Marvell a Neutral ratings 3 times since October 2013, earning no profit on the stock. Broadcom Corporation (NASDAQ: BRCM)
Rolland was encouraged by new products showcased by Broadcom, including “6G Wi-Fi… DOCSIS 3.1 STB platforms… universal wireless charging… and Broadreach auto-grade Ethernet.” Rolland thinks that Broadcom “may ultimately brand the technology” for 6G Wi-Fi.
He also noted that Broadcom’s wireless charging platform “may be expensive, but it provides a great amount of freedom while supporting next-generation Rezence technology.”
Rolland reiterated an Outperform rating on Broadcom and raised the price target from $48 to $50. He noted,:“We are on the precipice of a massive movement toward SDN that should drive accelerated networking growth rates… While we acknowledge near-term headwinds in mobile, we are willing to take a longer-term perspective, as [Broadcom] should be a core large-cap holding in the sector, owing to the company’s competitive advantages… product cycles, and strategic importance with customers.”
Rolland has rated Broadcom 13 times since July 2013, earning a 92 percent success rate recommending the stock and a +28.1 percent average return per recommendation.
Intel Corporation (NASDAQ: INTC)
Rolland noted that although Intel’s showcase as the CES was “less revolutionary” than that of others, he was “impressed by the lineup of 2015 PCs.”
Intel plans to integrate image and gesture recognition using RealSense technology into PCs, along with wireless charging capabilities. Rolland also highlighted the Intel Curie, a “button-sized SoC for wearable devices” that was unveiled at the conference. Intel Curie comes equipped with “compute, motion sensor, Bluetooth low energy, and battery charging capabilities.”
Rolland reiterated an Outperform rating on Intel and raised the price target from $40 to $52.
He noted: “Overall, while the lack of growth in PC has been discouraging, we believe that Moore’s law is considerably more durable than any one computing form factor and presents as good a business plan as any in the technology industry. We are increasingly confident that Intel can opportunistically extract value from the extra transistors afforded to it through the best silicon manufacturing operations in the world.”
Rolland has rated Intel nine times since June 2013, earning a 100 percent success rate recommending the stock and a +28.2 percent average return per recommendation.
QUALCOMM, Inc. (NASDAQ: QCOM)
Rolland noted that Qualcomm ,as a direct competitor of Broadcom for next generation “Wi-Fi dominance,” announced a new Wi-Fi router band that will be available by the end of the year, which is earlier than Broadcom’s expected release.
Qualcomm also announced a slew of inventions and innovations for handsets/wearables, and demonstrated “several concept cars from Honda, Maserati, and Cadillac, running Android on Snapdragon and powered by Qualcomm wireless charging systems.”
Rolland rated Qualcomm as an Outperform and maintained an $83 price target. He noted: “Stepping back, we think that Qualcomm remains the gold standard cellular-technology provider, and it is one of our preferred, mega-cap semiconductor longs, with favorable risk/reward dynamics. While we acknowledge that the company could potentially lose some share to competitors (including MediaTek, Marvell, and even Intel), we believe this lost share will be more than offset by ramping emerging market opportunities.”
Rolland has rated Qualcomm twice since January 2014, earning a 50 percent success rate recommending the stock and a +1.7 percent average return per recommendation.
Atmel Corporation (NASDAQ: ATML)
Rolland was excited to see Atmel showcase a “multitude of products” at CES 2015.
His favorites included touch for auto displays, autograde networking, keyless entry systems, and vehicle to vehicle (V2V), vehicle to infrastructure (V2I), and vehicle to X (V2X) solutions. In addition, the analyst believes Atmel’s U-series “of touch controllers finally gives the portfolio leading-edge capabilities including: (1) in-cell addressability, (2) hover recognition (with only 2 mm of jitter, versus as much as 9 mm from Synaptics), and (3) moisture immunity (still works with water on screen).”
Rolland rated Atmel an Outperform and raised his price target from $9 to $9.50. He noted: “Stepping back, we think the Street underestimates the true earnings power of (1) a longer-term cyclical recovery in the core MCU business, (2) a resurgence in maXTouch handset touch controllers (thanks to Xiaomi and Useries), and (3) new potential opportunities in crypto-memory. We are raising our price target from $9.00 to $9.50 to reflect these changes.”
Rolland has rated Atmel 5 times since April 2013, earning a 100 percent success rate recommending the stock and a +20.7 percent average return per recommendation. Christopher Rolland currently has a 70 percent overall success rate recommending stocks with an +11.7 percent average return per recommendation.
Latest Ratings for MRVL
|Oct 2016||Credit Suisse||Upgrades||Neutral||Outperform|
|Sep 2016||Susquehanna||Initiates Coverage on||Neutral|
|Sep 2016||Goldman Sachs||Assumes||Neutral|
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