NVIDIA'S Shareholder Returns Increased $800M, Wedbush Lowers PT

In a report published Friday, analysts at Wedbush maintained their Outperform rating on NVIDIA Corporation NVDA. The price target was lowered from $25 to $24. The company lowered its Q2 guidance, driven by Fx headwinds and a challenging PC market. Although the company reported its 1Q results only marginally below expectations, the lowered guidance for FQ2 is significantly below the estimates and the Street consensus. "FQ2 (Jul) revenue guide… was well-below the Street and our lower estimates. NVDA's lower outlook was due to impact from FX headwinds and lull in PCs ahead of Windows 10," the analysts said. At the same time, the company has increased its quarterly dividend payout by 15 percent and has expanded its share buyback program by a further $1.62 billion. The expected shareholder return for FY2016 had increased from $600 million to $800 million. In terms of the FQ1 results, the GAAP EPS and revenue came in below the midpoint of the company's guidance and marginally below the consensus and the estimates, declining 8 percent, quarter on quarter. However, GAAP gross margins increased marginally higher than the guidance, driven by NVIDIA's product mix. "We expect NVDA's increased commitment to shareholder returns to provide support to the stock and think shares will continue to trade in a tight range until the next significant catalyst," Wedbush added.