© Reuters. Marvell Technology’s (MRVL) Valuation ‘Compelling’ – BofA
By Sam Boughedda
BofA said Friday that Marvell Technology’s (NASDAQ:) valuation is “compelling” despite macro headwinds.
Analysts there reiterated a Buy rating and $65 per share price target on the stock, stating that cloud, 5G, and autos can “offset tougher enterprise comps.”
“Our new base/published model now projects MRVL’s FY24/CY23 sales to grow 5% YoY to about $6bn, below $6.9bn (+13% YoY) prior, and well below consensus at $7.1bn (+15% YoY). We expect MRVL’s cloud-optimized wins to provide double-digit growth in data center, but that could be offset by double-digit declines in enterprise networking, where current year 40%+ growth rate this year are unsustainable. We also expect 5G deployment in US/India, plus share gains to drive growth in carrier,” wrote the analysts.
In the near term, BofA believes the three growth peers Marvell, Nvidia (NASDAQ:), and Advanced Micro Devices (NASDAQ:) are “exposed to any headlines/capex announcements from cloud/enterprise customers.”
“The rolling correction in semis is likely to spread from consumer into enterprise and data center. That’s the driver for our proactive estimate reductions. However, once consensus reflects that scenario (likely during upcoming CQ3 earnings season), we believe the stock can recover as valuations, especially for MRVL appear compelling,” added the analysts.
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