UPDATE: Nomura Cuts PT to $16 on NVIDIA on Weak Guidance
Nomura reiterated its Buy rating on NVIDIA (NASDAQ: NVDA) but reduced its price target from $18 to $16 following the company's guidance.
Nomura said, “Nvidia reported solid F3Q numbers amid an uncertain PC market, with revenue of $1.2bn in line with our estimate of $1.2bn. EPS of $0.35 was better than our estimate and consensus of $0.33 and $0.30, respectively. Gross margin of 52.9% increased 110 bps, driven by a richer mix of Kepler shipments. However, Nvidia is guiding Jan down 9% q/q to 1.1bn, below our estimate of $1.2bn. While revs are lower, gross margin will remain flat, according to guidance. We believe the 28nm transition and weaker competition in GPU could help the company to sustain gross margin at these levels. Nvidia initiated a dividend of 7.5 cents per quarter which implies a yield of 2%. The company is also authorized to repurchase $1.2bn of stock over two years.
NVIDIA closed at $12.68 on Thursday.
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