Susquehanna Raises Price Target on NVIDIA (NVDA) Following EPS Beat
Susquehanna reiterated a Neutral rating on NVIDIA (NASDAQ: NVDA), and raised the price target to $20.00 (from $19.00), following quarter results. $1.153 bln revenue, was flat Q/Q, well ahead of consensus of $1.01 bln. $0.34 pro forma EPS vs. $0.21 consensus.
Analyst Chris Caso commented, "NVDA delivered a surprisingly good quarter and guidance in contrast to the more cautious outlook provided by others. While NVDA’s enterprise, cloud and auto businesses all posted declines, the core gaming graphics business performed much better than expected, growing 59% Y/Y, up from 25% Y/Y last quarter. Clearly, Street estimates had gotten too bearish after NVDA’s miss last quarter, but the performance does seem remarkable. Going forward, we’re left with two questions: whether the remarkable gaming growth - despite difficult macro conditions and FX headwinds – can be sustainable, and after that, what should one pay for the stock? Even off higher numbers following this report, after backing out the noncontinuing INTC royalty we still come up with under $1 of earnings, putting the stock at 15x C16 EPS plus cash, which we think would make the stock fairly valued assuming current revenue levels were to be sustainable."
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Shares of NVIDIA closed at $20.45 yesterday.