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

Graphics chipmaker NVIDIA Corporation NVDA, which is giving chip rivals Intel Corporation INTC and Advanced Micro Devices, Inc. AMD the jitters, is scheduled to report its fiscal third-quarter results after the market close on Thursday.

See Benzinga's preview of the results here.

The Analyst

Deutsche Bank's semiconductor analyst Ross Seymore previewed Nvidia's results.

The Rating

Deutsche Bank maintained its Hold rating Nvidia but raised its price target from $145 to $190, rolling forward its valuation on its upwardly revised earnings per share estimates.

The Thesis

Nvidia is likely to report a solid Q3, with revenues estimated at $2.41 billion, according to Seymore. This compares to the company's guidance of $2.35 billion, and the consensus estimate of $2.37 billion.

That said, recent strength in PCs and cryptocurrency could to lead to incremental upside, Seymore added.

Among segments, Deutsche Bank expects gaming revenues, accounting for 57 percent of sales, to increase 16 percent sequentially, and data center, accounting for 19 percent of sales, to rise by 10 percent.

The firm angles for sequentially flat auto revenues, a 5 percent drop in Proviz and a 17 percent decline in OEM/other revenues, which comprise crypto-related sales. Specifically, the firm expects crypto-related sales to plunge 42 percent sequentially.

The firm models GAAP earnings per share of 97 cents, ahead of the consensus of 95 cents. To reflect better gaming revenues, Deutsche Bank raised its F4Q and 2019 estimates.

Price Action

At time of writing, Nvidia shares were down 1.76 percent at $208.30. The stock has nearly doubled in the year-to-date period, following up on its stellar run in 2016.

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