Jefferies Maintains Hold, $32 Target on Cavium

Jefferies reiterates its Hold rating and $32 target price on Cavium

as the company lowers guidance for Q4. Jefferies says, "Cavium lowered its Q4 revenue guidance by 760 bps QoQ, driven by a combination of weaker demand and supply chain inventory adjustments. Our analysis suggests the supply chain is depleting inventories in Q4, for the third consecutive quarter, and at a P/E of 25x, we believe CAVM is partially baking in upside potential from 1H12 restocking." CAVM closed at $28.48 per share on Tuesday.