RBC Capital Assumes NVIDIA (NVDA) at Sector Perform

RBC Capital assumes coverage on NVIDIA (NASDAQ: NVDA) with a Sector Perform rating and a price target of $23.00.

Analyst Mitch Steves commented, "We are assuming coverage of NVIDIA with a Sector Perform rating and $23 price target (16x FTM earnings). Our thesis is predicated on the following key points: (1) Revenue shifting away from OEM into Auto, Gaming and HPC/Cloud; (2) Mix shift is gross margin accretive; (3) Capital allocation program is healthy with ~70% FCF returned to shareholders; (4) IP royalty payments will act as a drag with 25%+ of EBIT tied to Intel agreement to expire Q1 FY18; and (5) PC declines will likely offset growth segments near term. Given these dynamics and current in-line valuation (5-year average) we believe valuation is fair at this time."

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 $22.63 yesterday.

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