Evercore ISI maintains Marvell stock with $135 target

On Tuesday, Evercore ISI reiterated a positive outlook on Marvell Technology Group Ltd . (NASDAQ:MRVL), maintaining an Outperform rating and a $135.00 price target for the company’s shares. Trading at $85.83, Marvell’s stock has experienced a 7.7% decline over the past week, though it maintains a 21.3% gain over the last six months. According to InvestingPro analysis, the stock appears slightly overvalued at current levels. The research firm expressed optimism about Marvell’s prospects in artificial intelligence (AI) networking, anticipating potential sales growth in the coming quarters.

According to Evercore ISI, while the investment community’s primary focus might remain on Marvell’s application-specific integrated circuits (ASICs), the firm’s AI networking products, including 400/800G PAM4 digital signal processors (DSPs), are expected to contribute to revenue growth. With a current market capitalization of $74.3 billion and operating with a moderate debt level, Marvell maintains a solid financial position to support its growth initiatives. These processors are particularly relevant for their use in NVIDIA Corporation’s (NASDAQ:NVDA) server racks, which are anticipated to experience increased sales due to the Blackwell ramp.

Furthermore, Evercore ISI predicts an expansion in Marvell’s total addressable market (TAM) for AI networking. This expansion is driven by a growing demand for long-distance connectivity solutions and the development of new AI-related products such as PCIe retimers, which Marvell launched in 2024.

The price target of $135 set by Evercore ISI is based on a forward earnings per share (EPS) estimate of $4.46 for the fiscal year 2027, applying a price-to-earnings (PE) multiple of 32 times. This multiple is slightly higher than the six-year median of 29 times. The target price has also been discounted back one year at a rate of 10%. InvestingPro data reveals that while the company isn’t currently profitable, analysts expect positive earnings this year, with an EPS forecast of $1.57 for FY2025.

Evercore ISI’s endorsement reflects a belief in Marvell’s strategic positioning within the AI networking space and its ability to capitalize on emerging opportunities in the technology sector. The firm’s continued confidence in Marvell is underscored by the maintained price target and rating, signaling a positive outlook for the company’s financial performance. With analyst targets ranging from $87 to $188 and a strong consensus recommendation of 1.39, Marvell shows promising potential. For deeper insights into Marvell’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s AI initiatives and market position.

In other recent news, Marvell Technology Group Ltd. reported notable developments that could impact investor decisions. Stifel analysts maintained a Buy rating on Marvell, projecting the company’s January quarter revenue to meet or slightly exceed $1.80 billion, with non-GAAP earnings per share (EPS) of $0.59. This outlook is supported by strong growth in the Data Center segment, driven by AI and data center ramps. Meanwhile, Melius initiated coverage of Marvell with a Buy rating and a price target of $188, citing potential market share gains in the custom accelerator market and a robust financial outlook.

Cantor Fitzgerald reiterated its Overweight rating on Marvell, with a $160 price target, highlighting expected growth in Data Center revenues and AI-driven Optics. KeyBanc raised its price target for Marvell to $135, maintaining an Overweight rating, and emphasized the company’s strong AI ASIC growth prospects. Additionally, Marvell launched a new AI accelerator integrating co-packaged optics (CPO) technology, which is expected to enhance server performance significantly.

This new architecture aims to improve data transfer rates and power efficiency, offering cloud hyperscalers the ability to meet increasing AI application demands. The integration of optical components reduces signal loss and enhances signal integrity, leveraging Marvell’s silicon photonics technology. These recent developments underscore Marvell’s strategic focus on expanding its AI capabilities and market presence.

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