B.Riley FBR Thinks Marvell’s Stock is Going to Recover

B.Riley FBR analyst Craig Ellis maintained a Buy rating on Marvell (MRVLResearch Report) yesterday and set a price target of $26. The company’s shares closed yesterday at $16.09, close to its 52-week low of $14.69.

Ellis observed:

“MRVL’s 12/4 AMC results were slightly above Street estimates, and while outlook sales undershot the Street materially, gross margin and opex outperformance helped impressively shield EPS. We believe a F1Q20 inventory correction was expected, though its depth may surprise some. Numerous positives also emerged, auguring well for FY20&FY21. First, Cavium sales met F3Q’s guide and F4Q’s outlook overachieves. Networking product refresh is performing well, a growth and gross margin tailwind. Third, base station design wins and content gain are hitting, with potentially powerful late-FY20 sales acceleration. Fourth, product mix and opex execution are robust, leaving us more confident in targeted 66% GM and 35% OM in F2H20.”

According to TipRanks.com, Ellis is a top 100 analyst with an average return of 19.7% and a 60.0% success rate. Ellis covers the Consumer Goods sector, focusing on stocks such as Sequans Communications S A, Applied Materials Inc, and Axcelis Technologies.

Marvell has an analyst consensus of Strong Buy, with a price target consensus of $24.93, which is a 54.9% upside from current levels. In a report issued on November 29, MKM Partners also maintained a Buy rating on the stock with a $27 price target.

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Marvell’s market cap is currently $10.59B and has a P/E ratio of 57.26. The company has a Price to Book ratio of 1.38.

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Marvell Technology Group Ltd. engages in the business of providing semiconductors to high-performance application-specific standard products. It focuses on the development of complex System-on-a-Chip devices leveraging extensive technology portfolio of intellectual property in the areas of analog, mixed-signal, digital signal processing, and embedded and stand alone integrated circuits. The company’s product portfolio includes devices for data storage, enterprise-class Ethernet data switching, Ethernet physical-layer transceivers, mobile handsets, connectivity and other consumer electronics. Marvell Technology Group was founded by Sehat Sutardja, Weili Dai, and Pantas Sutardja in January 1995 and is headquartered in Hamilton, Bermuda.

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