Marvell has 'compelling value' at these levels despite macro headwinds, BofA says
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Shares of semiconductor company Marvell Technology (NASDAQ:MRVL) have fallen more than 56% year-to-date, but at these levels, they have a "compelling value proposition," despite a challenging global economy, Bank of America said on Friday.
Analyst Vivek Arya, who has a buy rating and $65 price target on shares of Marvell Technology (MRVL), noted the company has an "attractive, resilient" mix of revenue, with a lot coming from infrastructure and little from the consumer. However, shares have underperformed the broader Philadelphia Semiconductor Index (down 43% year-to-date) and have performed more in-line with Nvidia (NVDA) and Advanced Micro Devices (AMD), both of which have higher exposure to the PC and broader consumer markets.
Arya lowered his 2023 sales estimates to be about $6B, below the prior outlook of $6.9B and below consensus of $7.1B, but the company's prowess in the cloud may help keep growth positive, albeit slightly.
"We expect MRVLâs cloud-optimized wins to provide double digit growth in data center, but that could be offset by double-digit declines in enterprise networking where current year 40%+ growth rate this year are unsustainable," Arya wrote in a note to clients.
The analyst added he expects Marvell (MRVL) to benefit from 5G deployments in the U.S. and India, along with share gains in carriers to drive growth. 
Arya noted that at least until the first-quarter of next year, Marvell (MRVL), along with Nvidia (NVDA) and AMD (AMD) are "exposed" to any headline and capital expenditure announcements from cloud and enterprise customers, with the correction likely to move from the consumer markets to enterprise and data centers.
"However, once consensus reflects that scenario (likely during upcoming [third-quarter] earnings season), we believe the stock can recover as valuations, especially for MRVL appear compelling at 18x/14x [2023 and 2024 estimates]," Arya added, compared to the company's trailing three and five-year median PE of 32 and 26 times earnings, respectively.
On Tuesday, Citi cut its earnings estimates on Marvell (MRVL) and Nvidia (NVDA), citing worries over slowing data center sales as a result of the weakening global economy.