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Marvell Still A Hold On 'Softness' In China, Deutsche Bank Says

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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

Nov 2017Credit SuisseMaintainsOutperformOutperform
Nov 2017BarclaysUpgradesEqual-WeightOverweight
Nov 2017JefferiesUpgradesHoldBuy

View More Analyst Ratings for MRVL
View the Latest Analyst Ratings

Posted-In: Deutsche BankAnalyst Color Reiteration Analyst Ratings


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