UPDATE: Jefferies Drops PT to $37 on Cavium; Base Station Growth Potential

Jefferies reduces its price target from $40 to $37 on Buy-rated Cavium

based on growth potential in wireless base stations. Jefferies notes, "Q1 results beat the Street's revised estimates, but Q2 guidance missed, and could extend investor disappointment in the stock. Our thesis, driven by large growth potential in Wireless Base Station, remains unchanged. Additionally, we believe a higher proportion of higher margin Enterprise/Service Provider revenues would drive higher gross margins. Reiterate Buy with $37 PT, and buy on weakness." CAVM closed at $29.75 on Tuesday.