Susquehanna Downgrades Marvell (MRVL) to Neutral Amid Accounting Investigation

Susquehanna downgraded Marvell (NASDAQ: MRVL) from Positive to Neutral with a price target of $9.00 (from $16.00) amid accounting investigation.

Analyst Chris Caso commented, "We are downgrading MRVL from a Positive to a Neutral rating amid the company’s disclosure this morning of an investigation into its accounting and internal controls. Although the stock has had a material pullback, we consider the stock to be unownable during such an investigation, and it will likely take a considerable amount of time for investors to regain confidence in management. The company also released July quarter results, and revenue came in at the low end of guidance, largely consistent with our prior expectation – though the actual amount of revenue has now been clouded by the investigation. The release also shows a -5% GAAP gross margin, which was unexplained in the release. Our thesis on the stock had assumed value in MRVL if it were to spin or exit its handset related business, and focus on the core high cash flow business. Management unfortunately hasn’t acted to unlock that value, and the damage to investor confidence resulting from this investigation is likely to take some time to repair."

For an analyst ratings summary and ratings history on Marvell click here. For more ratings news on Marvell click here.

Shares of Marvell closed at $10.55 yesterday.

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