Wells Fargo Initiates NVIDIA at Market Perform (NVDA)

Wells Fargo is out with its report today on NVIDIA NVDA, initiating NVDA at Market Perform.

In a note to clients, Wells Fargo writes, "We are initiating coverage of Nvidia with a Market Perform rating on the shares. We believe there are several exciting aspects to the company and the stock, including Nvidia's great expertise in graphics chips and its potential as a supplier of mobile processors for tablets and smartphones. On the other hand, risks to the company's business and its stock value include a highly competitive business environment in graphics and mobile processor chips, and uncertainty as to how rapidly the tablet market might expand for tablet makers other than Apple. Our FY2012 and FY2013 EPS estimates are $0.98 and $1.25, respectively. Applying a multiple of about 14-17x our FY2013 (January) EPS estimate of $1.25 gives us our valuation range of $18.00-21.00."

At the time of posting, shares of NVDA were trading at $17.32, down 4.84% from Monday's close.