Marvell Up 5% On Strong Revenue Goal, Analysts Boost Price Targets

Marvell Technology shares rose 4.6% on Friday after the company outlined strong long-term growth targets at its virtual Investor Day event.

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Notably, Marvell (MRVL) now expects to deliver revenue growth (CAGR) of 10% to 15% over the long-term compared to its previous target of 6% to 8%. The semiconductor company anticipates its top-line to benefit primarily from opportunities in 5G, cloud and automotive markets.

The company expects to generate gross margin between 63% to 65% and operating margin of over 35% in the long-term. Marvell sees its operating expenses in the range of 28% to 30% as it continues to invest in growth strategies.

Following the Investor Day event, Susquehanna analyst Christopher Rolland raised his price target for Marvell to $50 from $42 and reiterated a Buy rating saying:

“Marvell is laser-focused on driving significant top-line growth enabled by their much-improved DC infrastructure exposure and growing 5G opportunities. Top growth drivers will include: 1) 5G networking; 2) a growing Cloud datacenter opportunity (DPU [Data Processing Unit] for networking, custom ASICs [Application-Specific Integrated Circuit], DIY SSDs [Solid-State Disks], and near-line); and 3) automotive Ethernet.”

The analyst noted that while the long-term revenue growth target is “seemingly ambitious”, the company has already achieved many design wins that give him the confidence in its ability to execute its plan. (See MRVL stock analysis on TipRanks)

Several other analysts increased their price targets for Marvell, including Oppenheimer analyst Rick Schafer and Deutsche Bank analyst Ross Seymore. Both analysts boosted their price targets to $50 from $45 and maintained a Buy rating.

However, Craig-Hallum analyst Christian Schwab downgraded the stock to Hold from Buy but kept his price target of $44 unchanged. Schwab believes that strong execution of the company’s targeted model is already reflecting in both Street estimates and the current stock price. He feels that shares are fairly valued at the current levels and prefers to step to the sidelines.

Overall, the average analyst price target of $46.45 for Marvell indicates an upside potential of 3.9% in the coming months as the stock has already advanced 68.2% year-to-date. The Street’s Strong Buy consensus for Marvell is based on 18 Buys, 6 Holds and no Sells.