Marvell Looks Good Ahead of Earnings

| About: Marvell Technology (MRVL)

Jefferies is out with a solid call on Marvell Tech (NASDAQ:MRVL) saying they expect CQ4 revenue to be above their own and Street estimate of ~$782MM (+3% Q/Q).

Firm believes Storage likely increased to $360MM (+8% Q/Q) and above their estimate of $345MM (+3% Q/Q) as strength in Mobile likely more than offset some weakness in Consumer. They also believe Mobile was likely up 20-25% Q/Q (higher than est. of up ~10%) as they estimate HDD shipments by Marvell's Mobile (2.5") HDD customers (Toshiba, Fujitsu, Samsung, and Western Digital) were up ~20% Q/Q in CQ4.

Also, Comm increased slightly to ~$435MM (+3% Q/Q), largely due to continued strength in PXA (+7% Q/Q) driven by RIMM.

Regarding guidance, they believe Marvell will guide CQ1 revenue inline to above their and St. estimate of ~$765MM (-2% Q/Q). Firm expects implied EPS guidance to be inline to slightly ahead of their estimate and St. of $0.13 driven by slightly better revenue and gross margin guidance.

Reiterates Buy and $21 price target, based on 20x (vs. peers at 15x) CY09 EPS. Think MRVL is well positioned to regain profitability and revenue growth in CY08 as it benefits from multiple product cycles and drives operational leverage within its acquired assets (PXA, Avago, QLogic).

Notablecalls: So we have Jeffco out saying MRVL may indeed come ahead of estimates when they report on Thursday. Note that Seagate (NASDAQ:STX) reaffirmed this AM and Western Digital (NYSE:WDC) actually upped their guidance last week. This all points to a healthy quarter for MRVL.

MRVL is a beaten down player and I think good results may propel the shares way (10-15%) higher from here.

I'm also hearing Deutsche Bank is out positive on MRVL this morning saying the stock's a buy ahead of earnings.

I think the stock's a buy here, especially with weak open.

Disclosure: No positions in stocks named