Marvell Still A Hold On 'Softness' In China, Deutsche Bank Says
In a report published Friday, Deutsche Bank analysts maintained a Hold rating on Marvell Technology Group Ltd. (NASDAQ: MRVL), with a price target of $14, citing continued softness in China and storage headwinds.
Marvell reported its F1Q16 revenues at $724m, representing a 16 percent q/q decline, slightly below the Street estimate of $733m. Storage revenue declined by 20 percent q/q to $349m, accounting for 48 percent of the company's revenue. The decline in Storage revenue resulted from PC supply chain and SSD weakness.
While M&W revenue declined 13 percent q/q to $179m on softness in China LTE, Networking revenue declined 7 percent q/q to $179m on muted Enterprise spending.
Marvell guided to F2Q16 revenue of $710-$740m, significantly short of the Deutsche Bank and Street estimates of $776m and $783m. Storage revenue is expected to decline further, with Networking being flat and M&W being flat to marginally up.
The revenue and EPS estimates for F2Q16 have been reduced from $776m to $727m and from $0.16 to $0.12, respectively. The revenue and EPS estimates for FY16 have been lowered from $3.3b to $3.1b and from $0.80 to $0.65, respectively. The revenue and EPS estimates for FY17 have been reduced from $3.5b to $3.2b and from $1 to $0.80, respectively.
"We maintain our Hold rating as we see numerous fundamental headwinds, structural change appears less likely, and CMU litigation outcomes remain difficult to predict," the analysts added.
Latest Ratings for MRVL
|Mar 2017||Goldman Sachs||Upgrades||Sell||Neutral|
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