TD Cowen downgraded Marvell Technology to Hold from Buy, citing concerns about its deal to acquire Lumentum. The firm cut its price target 50%, to $175 from $350. [3]
The downgrade followed a nearly 30% drop in Marvell shares over the past week amid investor concerns about the transaction. [3] TD Cowen cited expected earnings-per-share dilution from the all-stock deal and the risk that the acquisition comes near the peak of an AI infrastructure-related optical cycle. [3]
Bank of America also recently downgraded Marvell, citing the potential for an extended regulatory process. It said the deal was a surprise because the company did not mention a major acquisition at its recent investor day. [7, 8]