Needham Lowers Marvell Price Target to $300

Needham analyst N.

Quinn Bolton lowered the price target on Marvell (NASDAQ: MRVL) to $300 (from $400) while maintaining a Buy rating.

“Yesterday, MRVL announced an all-stock transaction for Lumentum (LITE) valuing the company at an unaffected EV of ~$115BN as of October 28.

Our key takeaways include: 1) The transaction combines complementary electrical and optical interconnect and switching technologies under one roof, 2) The combined company will be able to co-design optimized optical solutions for scale-up and scale-in networks, 3) The transaction is expected to close in 1HCY28, allowing an ample buffer for regulatory approval; 4) The transaction expands Marvell’s TAM to $550BN and unlocks $1BN in cost savings, primarily in COGS; and 5) Management expects the deal to be accretive in year-one post close, though our analysis shows modest dilution as we may be using a higher MRVL earnings base than management.

We decrease our 12-month PT to $300 on a lower P/E multiple.”

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