BofA Securities Upgrades Marvell to Buy

BofA Securities analyst Vivek Arya upgraded Marvell Technology (NASDAQ: MRVL) from Neutral to Buy with a price target of $110.00 (from $90.00).

“MRVL’s earnings call gives us greater confidence in: 1) company’s solid leverage to AI optical connectivity, 2) potential for success in upcoming Microsoft custom chip (XPU) program, and 3) turning the corner on Amazon XPU transition year.

For the first time in a long time, our out-year ests are going up meaningfully, with FY27/FY28E (~CY26/27E) sales raised by 8%/12% and pf-EPS raised by 15%/12% to $3.82 (+34% YoY) and $5.43 (+42% YoY).

Addition of Celestial AI positions the company well for the upcoming CPO transition in CY28/beyond.

Meanwhile, the stock at ~16x CY27E PE and ~4x EV/S appears compelling relative to comps at 29x PE and 9x EV/S. We upgrade to Buy with $110 PO (vs.

Neutral, $90 PO) based on 25x CY27E EPS incl. stock comp expense (vs. 19x excluding stock comp), in-line with and similar to methodology used for NVDA and AVGO.”

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