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Marvell Has Underappreciated 5G Opportunity, Cowen Says In Upgrade

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Marvell Has Underappreciated 5G Opportunity, Cowen Says In Upgrade

Marvell Technology Group Ltd’s (NASDAQ: MRVL) long-term chip partnerships in 5G infrastructure are wider in scope than previously anticipated, according to Cowen.

The Marvell Technology Analyst: Karl Ackerman upgraded Marvell Technology from Underperform to Market Perform and raised the price target from $18 to $31.

The Marvell Technology Thesis: Apart from the long-term design wins at Nokia and Samsung, Marvell's new capability in 5nm technology creates “significant optionality across its portfolio,” with an increase in heterogenous workloads, Ackerman said in a Friday upgrade note. (See his track record here.)

Marvell Technology has also entered into an agreement for Fusion-M and Octeon-TX processor design for a tier-two infrastructure vendor, the analyst said. 

"As more data proliferates from edge devices and end users seek to gain intelligence from data at the highest performance and lowest cost/watt, Marvell’s in-house IP on advanced n-node silicon should continue to create strong customer demand pull."

Marvell continues to be the sole merchant vendor for baseband and one of only two vendors for layer two and layer three control and transport functions in distributed units of the 5G Radio Access Network, Ackerman said. 

Yet the company’s Storage revenues could decline 1% in fiscal 2021, and this segment currently contributes around 40% of total sales, the analyst said. 

MRVL Price Action: Shares of Marvell Technology were trading higher by 6.79% to $38.35 ahead of the close Friday.

Related Links:

Analyzing Marvell Technology Group's Unusual Options Activity

Earnings Outlook for Marvell Technology Group

Latest Ratings for MRVL

DateFirmActionFromTo
Oct 2020KeyBancReinstatesOverweight
Oct 2020Craig-HallumDowngradesBuyHold
Oct 2020BenchmarkMaintainsBuy

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