TD Cowen Downgrades Marvell Technology After Lumentum Acquisition Plans

TD Cowen downgraded Marvell Technology's stock rating from Buy to Hold and reduced its price target from $350 to $175. The move follows reports that Marvell Technology plans to acquire Lumentum through an all-stock transaction.

Analyst Sean O’Loughlin cited concerns over the timing of the deal relative to the AI optical mini-cycle and the necessity of the merger for co-design optimization. TD Cowen estimates the acquisition will result in mid-single-digit percentage earnings per share dilution in 2028. This projection contradicts claims from Marvell Technology that the transaction would be accretive one year after closing.

Marvell Technology's stock price fell 29.6% over the past week amid these concerns. Other financial firms, including William Blair, Raymond James, and Stifel, have maintained positive ratings, viewing the acquisition as a strategic move or highlighting the company's leadership in optical components.