Susquehanna Upgrades NVIDIA (NVDA) to Neutral on Slightly Better GPU Trends

February 3, 2014 6:17 AM EST Send to a Friend
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Price: $20.46 --0%

Rating Summary:
    12 Buy, 22 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 7 | Down: 13 | New: 17
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Susquehanna upgraded NVIDIA (NASDAQ: NVDA) from Negative to Neutral with a price target of $14.00 (from $10.50) citing modestly better GPU trends.

"After missing estimates five consecutive quarters, we think the near-term fundamental catalyst for our Negative rating has run its course, and we are upgrading the stock to Neutral," analyst Chris Caso said. "Our most recent checks have noted an improved tone within NVDA's GPU business, mainly due to product shortages by AMD that are limiting the competitive pressure. On Tegra, we still hold low expectations for this business, but after a year of estimate reductions, Street estimates are down sharply as well."

While the firm is upgrading the shares, they are still not comfortable recommending the stock. They haven't changed their view that the Intel (NASDAQ: INTC) royalty payments to NVDA, which account for over half of net income, are not likely to recur after the present agreement expires in 2016.

For an analyst ratings summary and ratings history on NVIDIA click here. For more ratings news on NVIDIA click here.

Shares of NVIDIA closed at $15.70 yesterday.


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