By Senad Karaahmetovic
Shares of Marvell Technology (NASDAQ:MRVL) are down about 3.5% in pre-open Friday after the chipmaker issued weaker-than-expected guidance.
Marvell reported Q2 EPS of $0.57 to narrowly edge the analyst estimate of $0.56. Revenue for the quarter came in line at $1.52 billion.
For this quarter, Marvel said it sees EPS between $0.56 and $0.62, slightly below the consensus of $0.60. The company expects to generate Q3 revenue of $1.56 billion, which compares to the consensus of $1.58 billion.
A Morgan Stanley analyst cut the price target to $60 from $62 on “mixed” results. The analyst believes that weakening data center trends are likely to create “some anxiety.”
“Marvell's quarter did show some of the headwinds that we anticipated, but enterprise networking continues to materially outperform our expectations, while data center gets tripped up by new supply issues,” he said in a client note.
Goldman Sachs analyst is more positive on MRVL as he hiked the price target to $62 from $55 and reiterated the Buy rating.
“We believe the sustainability of revenue growth in excess of the industry average — supported by design wins and content growth across Cloud, 5G infrastructure, and Automotive — as well as the operating leverage inherent to Marvell are not fully priced in. We see the divergence in Marvell's fundamentals relative to the median company in our coverage universe we expect over the next few quarters to serve as a positive catalyst for the stock,” he wrote in a note.