Bank of America Cuts Marvell Target to $225 After Lumentum Deal

Bank of America cut its rating on Marvell Technology to neutral from buy and lowered its price target to $225, citing risks tied to the chipmaker’s planned Lumentum acquisition.

Marvell announced plans for an all-stock purchase of Lumentum valued at more than $100 billion. Its shares fell 13% on Nov. 2 after the announcement. The new $225 target is 31% above the stock’s close that day, down from the bank’s previous $400 target.

Bank of America analyst Vivek Arya cited the risk of an extended regulatory review, including in China. He also said $1 billion in expected cost cuts would not offset about 50% dilution in Marvell’s share count, and flagged potential customer/channel conflicts.

The proposed acquisition remains pending. Marvell has described the combination as a move to build a leading position in AI connectivity, the goal behind its planned Lumentum acquisition.