Marvell Technology Inc (MRVL)

[nuggetminer]

Barclay's Capital Commentary From Monday:

Investment Conclusion
We are lowering our estimates on Marvell due to
ongoing weakness in hard disk drives balanced in
part by steady gross margin and lower op ex. We
think Marvell is cheap at slightly above 1x sales
but upside is limited until fundamentals bottom.
Maintain 2-EW and lower price target to $8 (14x
CY09 $0.57) from $9 (14x old CY09 $0.67).

Summary
~ Our estimates decrease this qrtr to $672M (-15%
QoQ)/$0.14 ($0.08 incl ESO) from $708M/$0.17
and in CY09 to $2.7B (-15% YoY)/$0.57 ($0.34
incl ESO) from $2.9B/$0.67.
~ Though FQ4 is back end loaded we think Marvell
is tracking below sales guidance of down 8-13%
due to weakness in drives particularly in the month
of Dec.
~ Despite our expectation for weaker sales, gross
margin should still improve 50 bps and operating
expenses should drop inline or below guidance of
$260M.
~ We believe key sales growth drivers in CY10
include 60-75M client drives at Seagate (assumes
40-50 market share) and a new integrated
baseband/apps processor customer (Samsung).