BoA Still Staying Away From Marvell, Warns Of Declining Assets And Limited Disclosures

CEO and President of Marvell Technology Group Ltd. (NASDAQ: MRVL) have recently resigned. BofA Merrill Lynch’s Vivek Arya maintained an Underperform rating for the company, with a price objective of $10.

The departure of top officials and the addition of certain activist shareholders have led to renewed interest in the restructuring and potential M&A options for Marvell, analyst Vivek Arya said. He added, however, that there is limited fundamental upside.

Headwinds Facing Marvell

Arya identified several headwinds that could limit Marvell’s fundamental upside:

• The company’s secularly declining storage assets and uncompetitive assets in networking and Wi-FI
• Marvell does not have the necessary funds to make investments to stay independent
• Selling assets may be tough given lack of SEC filings by the company, change in auditors and lack of internal control
• Marvell’s prior sales to Blackberry could attract US CFIUS review

“We are cautious on Marvell due to its weak growth prospects in storage and networking and its various accounting investigations,” the analyst wrote.