Raymond James Maintains Strong Buy on Marvell, $295 Price Target

Raymond James analyst Simon Leopold reiterated a Strong Buy rating and $295 price target on Marvell (NASDAQ: MRVL).

“Bloomberg reported that Marvell may be in discussions to acquire Lumentum.

Following the recent analyst meeting, we suspected M&A was part of the capital-allocation toolkit where assets fit the company’s connectivity/custom platform strategy, but we did not anticipate this one.

We envisioned smaller technology tuck-ins. The after-market reaction had Marvell shares down ~9% and Lumentum up 9%.

We do not know how a deal might be structured, Lumentum’s market cap was $83B at the close vs. Marvell’s $226B with cash and equivalents near $4B and long-term debt near $5B.

While we see industrial logic, scenarios suggests a combination could be EPS neutral by CY28 or dilute Marvell’s EPS by +10% depending on the size and structure, which casts some doubt on the likelihood.”

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