Citi Says Buy Marvell Technology Stock After 2018 Slide

The brokerage firm also targeted 24% upside for the chip stock

Dec 13, 2018 at 12:55 PM
facebook X logo linkedin


Citigroup upgraded Marvell Technology Group Ltd. (NASDAQ:MRVL) to "buy" from "neutral," and raised its price target to $19 from $17.30 -- a nearly 24% premium to last night's close. The brokerage firm said Wall Street is discounting the chipmaker's impressive networking sales, and the short-term risk-reward profile looks attractive following MRLV's 2018 struggles.

At last check, MRVL stock is up 1.8% at $15.62, paring its monthly deficit to 3.4%. Longer term, the tech shares are down 38% from their early March 11-year peak of $25.18, with their 30-day moving average applying steady pressure since a mid-August bear gap. Additionally, the security tapped a 15-month low of $14.69 on Nov. 20.

mrvl stock daily price chart on dec 13

Nevertheless, the overwhelming majority of covering analysts maintain a "buy" or better rating on MRVL stock, with not a single "sell" to be found. Plus, the average 12-month price target sits all the way up at $23.72 -- in territory not explored in nine months.

Elsewhere, short sellers have been cashing in on the tech stock's slide, with short interest down 18.6% in the two most recent reporting periods to 22.85 million shares. These bearish bets still represent more than 5% of MRVL stock's available float, or nearly three times the average daily pace of trading.

Options traders, on the other hand, have been positioning for more losses. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MRVL's 10-day put/call volume ratio of 1.01 ranks in the 96th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

Today, puts have a slight lead over calls, with 2,354 of the former and 2,148 of the latter on the tape at last check, roughly 1.2 times what's typically seen at this point. The weekly 12/14 15.50-strike puts are most active, though it looks like speculators may be selling to open positions here, setting a floor for Marvell Technology stock through tomorrow's close.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI