Marvell stock price target lowered to $95 by UBS on data center weakness

Investing.com - UBS lowered its price target on Marvell (NASDAQ:MRVL) to $95.00 from $110.00 on Friday, while maintaining a Buy rating on the semiconductor company’s stock. According to InvestingPro data, Marvell, a prominent player in the Semiconductors industry, has demonstrated strong momentum with a 10.95% return over the past year despite trading at premium valuation multiples.

The price target reduction follows Marvell’s quarterly results, which showed weakness in its data center segment. UBS noted that while overall revenue guidance aligned with expectations after accounting for the $60 million lost from the sale of the auto ethernet business, the mix of revenue sources raised concerns. The company maintains solid fundamentals with a healthy current ratio of 1.88 and operates with moderate debt levels.

The investment bank highlighted that the data center guidance was weaker than anticipated, with the revenue gap being filled by less strategically important segments such as carrier and enterprise networking.

UBS attributed some of the data center weakness to "lumpiness" in Amazon’s custom ASIC business between fiscal quarters due to the Trainium refresh. Despite near-term challenges, the bank still expects Marvell’s Amazon business to grow next year, with Microsoft on track to ramp production in late 2026 or early 2027.

The analyst firm reduced its earnings estimates slightly but still projects approximately $4 earnings per share power for Marvell in calendar year 2027, supporting its continued Buy recommendation despite the lower price target. InvestingPro analysis indicates strong growth potential, with analysts expecting sales growth and profitability this year. Discover 10+ additional exclusive insights and detailed valuation metrics with InvestingPro’s comprehensive research report.

In other recent news, Marvell Technology has been the focus of several analyst reports following its latest quarterly earnings announcement. The company reported results that met expectations for the July quarter, with earnings per share guidance slightly above consensus for the upcoming October quarter. However, Marvell’s guidance for October quarter revenue fell short of expectations, projecting $2.06 billion compared to the anticipated $2.11 billion. Analysts have responded to these developments with varying opinions on the stock.

TD Cowen reiterated its Buy rating for Marvell, setting a price target of $90.00, despite concerns about the custom silicon business, which is expected to experience a temporary decline. Evercore ISI adjusted its price target from $133.00 to $122.00, maintaining an Outperform rating. Benchmark also maintained a Buy rating, with a price target of $95.00, noting inventory digestion issues with a major customer, Amazon, which are expected to resolve in the coming months.

Cantor Fitzgerald maintained a Neutral rating with a $75.00 price target, citing mixed results and guidance. Meanwhile, Rosenblatt lowered its price target to $95.00 from $124.00, while still maintaining a Buy rating, following Marvell’s mixed report that showed missed revenue expectations but better-than-expected earnings. These analyst insights reflect the current market sentiment and considerations for Marvell’s future performance.

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