Skip to main content

Market Overview

Why Keybanc Is As Bullish As Ever On Marvell Technology

Why Keybanc Is As Bullish As Ever On Marvell Technology

Marvell Technology Group Ltd. (NASDAQ: MRVL) reported third quarter earnings Tuesday, with a top- and bottom-line beat and encouraging guidance for the fourth quarter.

The Analyst

KeyBanc Capital Markets' Michael McConnell maintains an Overweight rating on Marvell's stock with a price target boosted from $25 to $29.

The Thesis

Marvell's earnings report was highlighted by the following, McConnell said: 

  • Improved strength in connectivity. 
  • An in-line gross margin rate of 61.6 percent — despite an unfavorable product mix in the quarter. 
  • Lower operating expenses. 
  • A 946-basis point improvement in gross margin from a year ago to 28.4 percent, which is "within reach" of the company's 30-percent long-term guidance.

Marvell's fourth quarter guidance implies a re-acceleration of growth in networking and can be traced to new network platform production ramps in North America and China, McConnell said in a research report. (See McConnell's track record here.) 

The networking segment was guided up by a rate in the high single digits quarter-over-quarter, which implies the strongest sequential growth in six quarters.

NAND supply is expected to improve in early 2018, which will benefit Marvell's supply-constrained customers, and SSD controllers are expected to account for 30 percent of storage in the fourth quarter, the analyst said. This would be favorable for Marvell, as SSD controllers are a higher-margin product and reduce the company's exposure to the secularly declining HDD market.

Price Action

Shares of Marvell were trading higher by nearly 2 percent early Wednesday morning.

Related Links:

35 Stocks Moving In Wednesday's Pre-Market Session

A Peek Into The Markets: U.S. Stock Futures Up Ahead Of Economic Data, Fed Speakers

Latest Ratings for MRVL

Mar 2021Morgan StanleyMaintainsEqual-Weight
Dec 2020Morgan StanleyMaintainsEqual-Weight
Dec 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for MRVL
View the Latest Analyst Ratings


Related Articles (MRVL)

View Comments and Join the Discussion!

Posted-In: HDD KeyBanc Capital Markets Michael McConnell NANDAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

TBPHMorgan StanleyMaintains30.0
PLUGRoth CapitalReiterates65.0
STTMorgan StanleyMaintains102.0
SAILMorgan StanleyMaintains75.0
RFMorgan StanleyMaintains24.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at