March9,2020 BARRON’S M11
Research Reports
HowAnalystsSizeUpCompanies
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Marvell Technology Group
• MRVL-Nasdaq
Overweight•Price $22.59 on March 4
by Piper Sandler
Strong beat, even with coronavirus haircut.
Marvell reported January-quarter results
and April-quarter guidance ahead of Street
expectations. Specifically, Marvell reduced
its April-quarter outlook by 5% and pro-
vided a wider revenue range to account for
the potential coronavirus impact.
For fiscal 2021, we are now modeling 94
cents a share on revenue of $3.02 billion,
compared with our previous estimate of 87
cents on revenue of $2.97 billion. For fiscal
2022, we are now forecasting earnings per
share of $1.46 on revenue of $3.59 billion,
compared with our prior estimate of $1.36
on revenue of $3.50 billion. The primary
driver of our estimate revision reflects
higher revenue expectations and lower op-
erating expenses. It appears that the stor-
age segment is stabilizing, while the net-
working segment is expected to benefit
from several growth drivers in the second
half of calendar 2020. Price target: $32.
Nokia•NOK-NYSE
Buy•Price $3.87 on Feb. 29
by CFRA
We are seeing increasing momentum in
the initial stage of 5G investment, led by
North America, that offsets the weakness
in other regions caused by tapering of 4G
investments. Overall, we believe that the
5G cycle could be much longer than [cycles
in] the past, given its wider spectrum de-
ployment not just for consumers but also
for industrials. Nevertheless, 5G contracts
are expected to be margin-dilutive, due to
pricing competition and strategy to gain
market share. Nokia’s 5G investment in its
end-to-end strategy comprised of solu-
tions, products, and services will likely
push out the margin recovery to 2021, in
our view. While the margin guidance cut is
disappointing, we think a leading network-
equipment vendor such as Nokia should
benefit from the 5G investment cycle.
Twelve-month price target: $5.
Skyworks Solutions...................32,M
Buy•Price $99.63 on March 4
by Needham
Similar to its peerQorvo(QRVO), Sky-
works Solutions updated its March reve-
nue outlook to include the impact from
Covid-19, expecting sales to be $765 mil-
lion, $45 million lower than the previously
guided midpoint of $810 million. EPS guid-
ance is also reduced to $1.34 a share from
$1.46. Skyworks has significant exposure
to Apple (about 56% in fiscal first-quarter
2020), Samsung (around 5%), with another
24% split among the three tier-1 handset
original-equipment manufacturers (Xiaomi,
Oppo, Vivo). We maintain our Buy rating
and our $145 price target (which implies a
17 times price/earnings ratio on fiscal-year
2021 EPS of $8), on Skyworks’ strong po-
sitioning in the 5G smartphone cycle and
significant radio-frequency content in-
creases.
PulteGroup•PHM-NYSE
Positive•Price $41.55 on March 3
by Susquehanna Group
PulteGroup [a home builder] has been im-
proving returns and diversifying its prod-
uct set, all while protecting gross margins
and steadily returning capital to share-
holders. Moreover, our spring checks are
showing that the company’s core trade-up
segment is seeing a reacceleration in
demand and pricing power.
While the market selloff has spared few,
the fundamentals for housing remain
strong and should be relatively insulated
from any long-term virus impact. The pull-
back last week has given us the opportu-
nity we’ve been looking for to get more
constructive on the shares, which we are
upgrading from Neutral to Positive.
We are raising our EPS estimate for fis-
cal 2020 modestly, as we increase our or-
ders outlook for first-quarter 2020 and
continue to model deliveries above the
high end of management’s guidance
range. For fiscal 2020, we now forecast
EPS of $4.25, up from $4.22 previously.
We’re also raising our price target from
$50 to $51, as we apply our static 12 times
P/E multiple to our new estimate.
Ciena• CIEN-NYSE
Outperform•Price $43.24 on March 5
by Raymond James
We maintain our Outperform rating after
Ciena’s report that included a sales and
EPS beat and fiscal guidance consistent
with prior commentary.
Ciena’s fiscal 2020 second-quarter outlook
includes a 3% Covid-19 head wind. Despite
risks associated with the virus, Ciena [which
sells optical transport and switching sys-
tems] appears poised to do well in fiscal
2020 and beyond. We envision upside from
its newer customers, such as NTT, Deutche
Telekom, CenturyLink, Charter, and more,
which will enable Ciena to achieve or exceed
its 6% sales growth target in fiscal 2020,
coupled with margin expansion. We think
that an incremental 10% contribution from
this group could expand Ciena’s calendar
2020 sales growth above the fiscal year 6%
to 8% forecast. We expect AT&T, Verizon,
and India to hold fairly flat year over year.
Price target: $52, down from $55..
INSIDER TRANSACTIONS RATIO
0
10
20
30
40
50
60
M A M J J A S O N D J F
Ratio of Insiders Sales to Buys. Readings under 12:1 are Bullish. Those over 20:1 are Bearish.
The total top20 sales and buys are 435, 225 ,633 and 41, 186 ,485 respectively; Source: Thomson Reuters
Bearish
Ratio = 11 Bullish
INSIDER TRANSACTIONS: Recent Filings
Purchases
$ Val
Company/Symbol Insiders Shares (000's)TrinityIndustriesTRN 1 276,175 5,731
NGMBiopharmaceuticalsNGM 2 276,630 4,962PaloAltoNetworksPANW 1 16,229 3,002
PNCFinancialServicesPNC 1 24,168 2,985CinemarkCNK 2 94,800 2,540NexpointRealEstateFinanceNREF 3 121,632 2,282
ContinentalResourcesCLR 2 106,200 1,930
EastStoneAcquisitionESSCU 1 167,000 1,670AllegiantTravelALGT 1 11,000 1,498TivityHealthTVTY 8 122,287 1,494AssuredGuarantyLtdAGO 1 36,000 1,486VICIPropertiesVICI 4 58,845 1,470
AmericanAssetsTrustAAT 1 33,313 1,425KKR&CoKKR 1 50,000 1,419PinnacleFinancialPartnersPNFP 3 25,500 1,360CallonPetroleumCPE 2 605,050 1,271FreshpetFRPT 5 18,424 1,216
CuteraCUTR 1 50,000 1,208
BrinksBCO 1 15,000 1,200SolarCapitalSLRC 1 54,000 1,039Sales
$ Val
Company/Symbol Insiders Shares (000's)MicrosoftMSFT 3 285,228 48,079
CloroxCLX 3 273,024 46,153
CotyCOTY 1 3,260,329 37,473ApolloGlobalManagementAPO 1 679,713 28,841SBACommunicationsSBAC 3 91,026 26,247LululemonAthleticaLULU 1 106,753 23,699AlphaProTechAPT 7 1,128,607 23,162
NexteraEnergyNEE 2 85,299 22,137SnapSNAP 1 1,485,521 20,736PaypalPYPL 3 182,878 19,675StrategicEducationSTRA 1 128,905 18,887DatadogDDOG 2 364,200 16,175
AnaplanPLAN 1 344,372 15,511
NikeNKE 1 165,000 15,006RegeneronPharmaceuticalsREGN 3 30,891 14,069BostonBeerSAM 6 36,572 13,452
TellurianTELL 1 4,001,139 13,102SEIInvestmentsSEIC 1 190,000 11,762
VaronisSystemsVRNS 5 135,094 10,749SynchronyFinancialSYF 5 342,327 10,309Aninsiderisanyofficer,directororownerof10%ormoreofaclassofacompany'ssecurities.Inmostcases,aninsidermustreportanytradeto
theSECwithintwobusinessdays.ThetableshighlightcompaniesthatfiledwiththeSECthroughlastWednesday.Thetablesdonotinclude
pension-planoremployeestock-optionactivity,tradesbybeneficialownersof10%ormore,tradesunder$2pershareortradesunder100
shares.The"Purchases"columnincludesonlyopen-marketandprivatepurchases;the"Sales"columnincludesonlyopen-marketandprivatesales,
andexcludestradesprecededbyoptionexerciseinthe12monthspriortothereportedevent. Source:ThomsonReuters