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JP Morgan Adjusts Guidance on Cavium

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J.P. Morgan has published a report on Cavium Networks (NASDAQ: CAVM) resetting guidance for the third quarter.

In the report, J.P. Morgan wrote, "Although the light 3Q guidance may be disappointing to some investors, we believe most of the $4M revenue shortfall is coming from the impact of an inventory hub transition at Cisco. Setting that aside, we believe the company's service provider and broadband/consumer businesses are driving strong product cycle ramps in 3Q. We expect the company's enterprise business will resume growth in 4Q driven by new platform ramps at Cisco, Citrix, F5, and Juniper and that the company's service provider business will be ramping into numerous basestation projects commencing in 4Q as well. Our primary research efforts lead us to believe that CAVM is growing its design win pipeline at 45-50% Y-Y, which we believe will help ensure sustained strong growth through C13. We reiterate our Overweight rating with PT of $55."

J.P. Morgan rated Cavium an Overweight with a price target of $55.00. Cavium closed Tuesday at $32.06.

 

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