Stifel maintains Buy on Marvell stock with $130 price target

On Friday, Stifel analysts maintained a Buy rating on Marvell Technology Group Ltd . (NASDAQ:MRVL), currently trading at $91.72 with a market capitalization of $79.17 billion, maintaining their steady price target of $130.00. The stock has seen a significant -20.6% decline year-to-date, though InvestingPro data shows strong analyst support with a consensus Strong Buy rating. The firm’s analysts expect the company’s January quarter results, scheduled for release in 5 days on March 5th, to align with or slightly surpass their estimates of $1.80 billion in revenue and $0.59 in non-GAAP earnings per share (EPS). InvestingPro analysts forecast full-year EPS of $1.57, suggesting continued improvement in profitability. This projection is based on several factors, including low to mid-20% quarter-over-quarter growth in the Data Center segment due to continued strong AI and data center ramps.

Furthermore, they anticipate mid-teen percentage growth quarter-over-quarter in Carrier Infrastructure and Enterprise Networking. The Automotive and Industrial segments are expected to see low to mid-single-digit percentage growth quarter-over-quarter, while the Consumer segment is predicted to decline by a mid-teen percentage quarter-over-quarter.

Looking ahead to the April quarter, Stifel analysts forecast that the guidance midpoint will exceed their estimate of $1.84 billion, which would represent a 2.0% increase from the previous quarter. This optimistic outlook is supported by continued momentum in Data Center and AI initiatives, even as non-AI end markets appear to have bottomed out.

The analysts underscored the significance of Data Center revenue, which constituted 73% of October quarter revenues, by citing capital expenditure budgets from major hyperscalers. Notable increases in year-over-year capital expenditure budgets include Google (NASDAQ:GOOGL) at 43%, Microsoft (NASDAQ:MSFT) at approximately 40% for FY25E, Meta (NASDAQ:META) at 59%, and Amazon (NASDAQ:AMZN) at 27%.

In summary, the Stifel team reiterated their Buy rating and 12-month price target of $130 for Marvell Technology Group Ltd., which is based on a 14.8 times multiple of the company’s estimated CY25E enterprise value to sales. According to InvestingPro analysis, the stock currently appears overvalued relative to its Fair Value, with high EBITDA and revenue valuation multiples. Discover 10+ additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription, including the detailed Pro Research Report available for MRVL and 1,400+ other US stocks.

In other recent news, Marvell Technology Group Ltd. has been in the spotlight with several key developments. The company recently announced an advancement in its custom AI accelerator architecture, integrating co-packaged optics technology to enhance server performance significantly. This innovation is expected to allow AI servers to scale more efficiently, improving latency and power efficiency. Additionally, Marvell’s earnings prospects have received positive attention from analysts. Melius initiated coverage with a Buy rating and a price target of $188, citing the company’s potential growth in the AI sector and custom compute solutions. KeyBanc also raised its price target for Marvell to $135, maintaining an Overweight rating due to anticipated demand for AI capabilities and shipments of Trainium 2 at Amazon Web Services. Furthermore, Raymond (NSE:RYMD) James increased its price target to $130, highlighting Marvell’s strategic engagements and potential revenue growth. These developments underscore a positive outlook for Marvell, particularly in the AI and custom silicon markets.

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