On Monday, Evercore ISI exhibited confidence in Marvell Technology (NASDAQ:MRVL), with a significant boost in the company's price target, now set at $122.00, up from the previous $98.00. The firm has maintained its Outperform rating on the stock. Currently trading at $92.69, Marvell has demonstrated remarkable momentum with a 76% return over the past year, according to InvestingPro data.
The optimism towards Marvell comes ahead of the October quarter report. Despite the stock's strong performance, which has doubled the S&P 500's year-to-date gains and increased by 6% in the last month, Evercore ISI sees a favorable setup for the company. Marvell's shares are currently trading at a 35% and 19% premium on an absolute and relative basis to the S&P 500's next twelve months (NTM) price-to-earnings (PE) ratio, respectively.
Evercore ISI highlighted several positive factors supporting their outlook. These include an anticipated peak in year-over-year growth, an expansion in NTM earnings per share (EPS), and encouraging comments from customers.
While the company reported losses in the last twelve months, InvestingPro data shows analysts expect Marvell to return to profitability this year with a forecasted EPS of $1.47. The firm's revised price target is based on a calculated $4.47 calendar year 2027 EPS and a 30x PE multiple—a slight increase from the 29x six-year median—discounted back one year at a 10% rate.
The analyst at Evercore ISI underscored the positive sentiment, stating, "We are buyers of MRVL heading into the OctQ report as we see the setup as more positive." This suggests that, despite the stock's recent outperformance and the premiums it commands, the firm believes the growth prospects and earnings potential are strong.
Marvell's financial performance and market position will be closely watched as it approaches its October quarter report, with investors and analysts alike keen to see if the company can meet or exceed expectations. The new price target from Evercore ISI reflects a bullish stance on the company's ability to continue its growth trajectory.
In other recent news, Marvell Technology has been the focus of several analyst reports, with Rosenblatt maintaining a Buy rating and a price target of $120. The firm anticipates Marvell will surpass expectations in its upcoming earnings report, driven by robust growth in artificial intelligence (AI), particularly in data center ASICs, networking, and electro-optics. Marvell's AI sales targets for fiscal years 2025 and 2026 have been revised to $1.5 billion and $2.5 billion, respectively.
Other firms, including Susquehanna, Oppenheimer, and Deutsche Bank (ETR:DBKGn), have also maintained positive stances on Marvell, citing strong AI demand and potential growth in the company's Inphi (NASDAQ:IPHI) and custom ASIC segments. However, Loop Capital initiated coverage on Marvell with a Hold rating, expressing caution due to the company's current valuation.
Marvell reported Q2 revenues exceeding expectations at $1.27 billion, leading to positive ratings from BofA Securities, KeyBanc, and TD (TSX:TD) Cowen.
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