UBS analyst Stephen Chin downgraded Marvell Technology Group (MRVL) to Sell saying Western Digital's (WDC) acquisition of SanDisk (SNDK) could hurt the company's storage sales. SanDisk is one of Marvell's biggest Solid State Drive chip customers, and Chin is concerned that Western Digital could use lower cost SSD controllers from Asia suppliers. He cut his price target for Marvell shares to $6 from $9.10. The stock closed yesterday down 12c to $9.44.

Benchmark upgraded Western Digital to Buy from Hold with an $85 price target.

Sees Q4 revenue $3.6B-$3.8B, consensus $3.69B.

Reports Q3 GAAP EPS 34c. Reports Q3 revenue $3.46B, consensus $3.36B. "As evidenced by our excellent third quarter results, Western Digital continues improving through-cycle profitability and dampening business cycles by leveraging our strategy of developing a diversified portfolio of industry-leading products across a broad range of end markets," said David Goeckeler, Western Digital CEO. "We are in the early innings of unlocking the full potential of this company, and as industry supply and demand dynamics continue to improve, we will remain disciplined around our capital spending and focused on driving innovation and efficiency across our businesses. We are confident in our strategy and the actions we have taken to-date, which successfully position us to capitalize on the promising growth prospects that lie ahead."

Pre-earnings options volume in Western Digital is 1.4x normal with calls leading puts 7:5. Implied volatility suggests the market is anticipating a move near 6.2%, or $4.32, after results are released. Median move over the past eight quarters is 2.1%.