07:10 MRVL Marvell: Friedman Billings raises Q1 ests on strong channel checks; stock likely oversold (10.85 )
Friedman Billings notes recent production checks show increasing order strength at MRVL as hard disk drive chip demand remains robust. Firm is raising their 1Q rev forecast from -7% QoQ previously, to down -5.5% QoQ, with FY09 EPS ests increasing from $0.62 to $0.65. With the stock now trading below $11, firm believes MRVL is nearing oversold conditions. However, firm is maintaining their Market Perform rating given that macroeconomic fears are still rampant. Longer term, the firm needs to address its 'opex gone wild' investment strategy and meaningfully grow revs in its Xscale and nascent business segments.
07:11 Friedman Billings provides industry checks on PC, iPod, iPhone, and related chip sellers
Friedman Billings notes PC datapoints are a bit mixed with strong notebook trends, but there is some slight softness in desktop shipments in the channel and in the U.S. Firm views these declines as purely seasonal and not yet suggestive of any significant macroeconomic impact. Second, checks show iPod/iPhone production builds should decline by roughly 50% QoQ in 1Q, reflecting the very seasonal nature of these products. Firms exposed to either the iPhone or the iPod include BRCM, MRVL, SWKS, CSR, IFX, Samsung Electronics, and SSTI. Third, production checks show increasing order strength for MRVL, stable order momentum for SLAB, and weakening order momentum for LSI and BRCM. Fourth, while LSI is beginning to look cheap, firm thinks declining order momentum and increased competition in SAS based servers make LSI less desirable than similarly priced peers like FCS or ONNN.
