BofA Securities Sees 4 Reasons NVIDIA (NVDA) Stock Reaction Could Be Negative After Earnings; PT to $250
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BofA Securities analyst Vivek Arya reiterated a Buy rating and raised his price target to $250 (from $225) on NVIDIA (NASDAQ: NVDA) ahead of earnings post-close on August 18th but thinks this could be a sell the news event.
The analyst stated "we look for upside to consensus Q2 ($6.3bn) and Q3 ($6.55bn) sales outlook. However, we anticipate enhanced volatility given: 1) the stock’s 30% move in the past 3mo (vs. SOX up 8%) following its split announcement; 2) temporary effect of crypto currency price swings in mix of gaming GPU and CMP boards; 3) tougher YoY compare in FQ2/Q3 data center sales as NVDA anniversaries addition of Mellanox from last year; and 4) known but still modest 2-3% headwind to EPS from recent revision in tax rates. We consider it possible for the initial stock reaction to be negative, but we believe solid long-term fundamentals will eventually prevail to create an enhanced Buy opportunity.
Shares of NVIDIA closed at $197.50 yesterday.
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