Marvell Falls as Analysts Cut First-Quarter Estimates on Coronavirus

Analysts at Oppenheimer and Deutsche Bank cut their estimates on Marvell's earnings and revenue.
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Shares of Marvell Technology (MRVL) - Get Report took a hit Friday after a pair of analysts forecast a drop in first quarter earnings and revenue amid the disruption to supply chains in China caused by the coronavirus.

The chipmaker's stock price fell 3.02% to $19.93 a share as analysts at Oppenheimer and Deutsche Bank cut their estimates on the chipmaker's earnings and revenue.

Oppenheimer is predicting a 5% drop in first quarter sales for the Hamilton, Bermuda-based semiconductor giant, offset somewhat by a projected lift to third and fourth quarter earnings as demand, now bottled up, rebounds.

Oppenheimer cut its estimate for Marvell's first-quarter earnings to 12 cents a share, down from 14 cents, with a price target of $30 a share and an outperform rating.

"We expect drag to prove transitory, with demand pushed out vs. cancelled," analysts at Oppenheimer wrote.

Meanwhile, Deutsche Bank analyst Ross Seymore has reduced his estimate for Marvell's first quarter revenue by 4% to $650 million, down from $675 million, while lowering his outlook on earnings to 11 cents a share, down from 14 cents a share.

The Deutsche Bank analyst is also predicting a 9% drop in earnings for 2020 as a whole, though with a smaller, 3% decline in 2021 and 2022 "as we expect business to rebound … on a normalization of the supply chain."

Deutsche Bank has a buy rating on Marvell and a price target of $30 a share.

Analysts at both firms remain bullish on Marvell's ability to capitalize over the longer-term on the shift to 5G, with Oppenheimer calling the chipmaker "our top 5G infrastructure play."

Meanwhile, analysts at Rosenblatt Securities have decided to stick with their buy rating on Marvell, though with a slightly higher price target than Oppenheimer and Deutsche Bank of $32 a share.