UPDATE: Morgan Stanley Downgrades NVIDIA On Projections Of Significant Headwinds

In a report published Monday, Morgan Stanley analyst Joseph Moore downgraded NVIDIA Corp

from an Equal-weight rating to an Underweight rating while setting the price target to $13.00. In the report, Morgan Stanley says: "The stock seems to be pricing in substantial earnings improvement that is still uncertain. Net cash per share is $5.15, and we now value the Intel royalty at $0.78 (see below), so the balance of the business has an enterprise value of ~$10 per share; that business generates only $0.42 in EPS in 2014 (EPS excluding the after-tax benefits of the Intel royalty), so enterprise value is 24x EPS, or 2.2x revenues. Despite some enthusiasm for growth prospects we don't see the case for that premium to the group's average multiple of 14x, and think the stock is likely to face significant headwinds." NVIDIA closed on Friday at $16.17.