Market Overview

Nvidia Bears Still Exist: Wells Fargo Keeps Stock Rated Underperform

Share:
Nvidia Bears Still Exist: Wells Fargo Keeps Stock Rated Underperform

NVIDIA Corporation (NASDAQ: NVDA), one of the hottest stocks over the last two years, reported its third-quarter earnings, which could re-start the bull versus bear debate as the stock trades at an all-time high and investors question what is an appropriate valuation moving forward.

The Analyst

Wells Fargo's David Wong.

The Rating

Wong Maintains an Underperform rating on Nvidia's stock with a price target raised from $75 to $87.

The Thesis

Nvidia's earnings report showed "impressive" sales momentum, which grew 18 percent sequentially and 32 percent year-over-year, Wong said in a note. GAAP gross margin improved from 58.4 percent in the prior quarter to 59.5 percent. The company also showed revenue growth on a sequential and year-over-year basis across every segment, except OEM & IP which saw a 24 percent drop sequentially but was up 3 percent year-over-year.

Despite Nvidia's clearly "strong product offerings" across multiple high growth markets, the stock's valuation needs to be considered. The analyst's fiscal 2019 EPS estimate was boosted from $3.45 to $4.34 and an appropriate price target multiple on 2019 EPS is 20x which implies an $87 price target.

Price Action

Shares of Nvidia were trading higher by more than 5 percent early Friday morning at $215.92, which is above the prior 52-week high of $212.90.

Related Links:

Expectations Mount For Nvidia; Analyst Raises Target To $190 Ahead Of Earnings

Sizing Up The Sizzle In Semiconductor ETFs

Image Credit: By yoggy0 from Yokohama, Japan (SIGGRAPH Asia 2009) [CC BY 2.0], via Wikimedia Commons

Latest Ratings for NVDA

DateFirmActionFromTo
Nov 2019MaintainsBuy
Nov 2019MaintainsOverweight
Nov 2019MaintainsOverweight

View More Analyst Ratings for NVDA
View the Latest Analyst Ratings

Posted-In: David Wong semiconductor Wells FargoAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

Related Articles (NVDA)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NTWKSidoti & Co.Maintains8.0
DISRosenblattMaintains175.0
FTNTRBC CapitalMaintains109.0
ITTDA DavidsonMaintains80.0
DKSSusquehannaReiterates48.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Vanguard's First New ETF Of 2017 Is A Corporate Bond Fund

USD/CAD Forecast: Inverse Head And Shoulders Reversal Ahead?