Auriga Raises PT On CAVM To $56

Auriga has raised its price target on Cavium Networks (NASDAQ: CAVM) from $54 to $56 and are maintaining a Buy rating on the stock, following a strong quarter.

Says Auriga, “We maintain our Buy rating and increase our price target to $56 from $54 as CAVM reported yet another beat and raise quarter, driven by strength in the service provider segment and surprisingly strong growth at its largest customer, Cisco (CSCO, Hold). The guidance could have been higher as Celestial revenue recognition will be delayed until May. A combination of strong revenue growth and lower tax rate easily offset the effects of higher opex to drive a significant EPS ($0.03-$0.04) beat…We are also encouraged by the introduction of 32 core Octeon2 processor, as our checks show that CAVM is currently outpacing competition and winning the lion's share of new design wins.”

CAVM closed yesterday at $47.20.