FBR Capital Raises Price Target on NVIDIA (NVDA) Following 2Q EPS Beat

FBR Capital reiterated a Market Perform rating on NVIDIA (NASDAQ: NVDA), and raised the price target to $24.00 (from $23.00) following 2Q15. NVDA reported revenue of $1.15B, better than the Street estimate of $1.01B. Non-GAAP EPS of $0.34 were $0.13 better than the Street’s estimate.

Analyst Christopher Rolland commented, "On Thursday evening, August 6, NVIDIA reported better-than-expected C2Q15 results and C3Q15 guidance. While the overall PC market continues to struggle (management believes PC OEM GPU revenue is down $200M YOY), NVIDIA continues to benefit from an almost uncorrelated market (management mentioned multiple GPU purchases per gaming PC lifespan) as it continues to take market share from AMD. Jon Peddie Research believes that GPU sales fell –3% YOY as NVIDIA captured significant share from AMD. We expect this trend to slow (but not reverse) over the next few years as AMD ramps new Fiji GPUs (with high-bandwidth memory) and as 14 nm GPUs ramp ahead of NVIDA. Outside of graphics, automotive continues to impress as revenue was up 71% YOY, with great visibility into design wins through 2017. Finally, we’re impressed by better gross margin as NVDA is clearly benefiting from higher-quality product mix, but also as it benefits from cheaper wafer pricing as it stays on the current node (28 nm) for significantly longer than any prior node. We rate shares at Market Perform but raise our price target to $24 based on a 13x target P/E multiple (2016 EPS, including stock compensation, net cash, and related interest income)."

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 $20.45 yesterday.

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