NVIDIA (NVDA) PT Raised to $40 at RBC Capital
RBC Capital analyst Mitch Steves reiterated an Outperform rating and lifted his price target on NVIDIA (NASDAQ: NVDA) to $40.00 (from $36.00) following solid results and guidance driven by data center and gaming.
Stevens commented, "Nvidia reported a solid quarter from both a top and bottom line perspective driven by Datacenter +63% y/y, Auto +47% y/y and Gaming +17% y/y. In addition to a positive quarter, guidance was solid as the Company anticipates seeing growth across all segments (excluding OEM) (implying no pause from Pascal). Beyond the revenue drivers, gross margins are being guided to 58% (+/- 50bps) which implies that new high-end gaming GPUs are above current corporate averages (originally 56%). Net Net: the Company reported a solid quarter across the board, and we are raising estimates and our price target to $40 (from $36), which suggests a 20x multiple on CY17E EPS of ~$2."
The firm's Jul-qtr estimates stand at $1.35B/$0.48 and FY17E estimates move to $5.59B/$2.00. Finally, they also adjust FY18E estimates to $5.84B/$1.98.
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Shares of NVIDIA closed at $35.57 yesterday.