UPDATE: Stifel Nicolaus Maintains Buy, Lowers PT to $33 on Cavium

Stifel Nicolaus reiterates its Buy rating on Cavium

and lowers its price target to $33 from $35 as the company is hit by slowdown across service providers. Stifel Nicolaus says, "Cavium announced yesterday after the market close that 4Q11 revenues may fall short of previously guided estimates. The new estimate is $56mn - $57mn, a 16.6% sequential decline at the midpoint, well below previous expectations for an 8%-10% sequential decline. In our view the main difference is prolonged weakness in telecom service provider demand, which we view as affecting all suppliers to this market. We continue to believe Cavium has the long-term designs in place at the tier 1 communications equipment suppliers to allow it to outperform its peers as demand returns." CAVM closed at $28.48 per share on Tuesday.