Shares of Nvidia are up 4 percent and poised for a record close on an upgrade from SunTrust Robinson Humphrey.
Here’s the thing: SunTrust is playing catch-up with the rest of Wall Street, who have already upgraded Nvidia.
Nvidia’s shares have more than tripled in the last 12 months, beating out the returns of any other company in the S&P 500. Early last month, Citi set a 12-month price target of $180 on Nvidia. That’s a tad more bullish than SunTrust.
The stock posted a record close of $159.94 in early June before pulling back. Nvidia was last at $162.40 with an hour to the close in New York. The shares are still a few dollars short of their all-time intraday high of $168.50.
SunTrust’s William Stein admits he is a bit late to the call. “We’ve under-forecasted the growth potential in these markets,” Stein said, referring to Nvidia’s growth in datacenter, gaming and automotive.
Stein said SunTrust is modeling 82 percent annual datacenter growth through 2018 versus Street estimates of 61 percent. His firm matches Wall Street’s estimates of 11 percent year-over-year growth through 2018 in gaming.
Stein said that datacenter growth can be “lumpy” and calls it out as one potential risk.
“A temporary slowdown in growth would not only hurt revenue & EPS but would likely damage the P/E multiple as well,” Stein said. “A slow down in the PC gaming growth or increased competition in this market could also damage revenue, EPS, and the P/E multiple.”
SunTrust previously had a hold on Nvidia at $124. With its move to a buy rating, SunTrust set a $177 price target.
Source: Tech CNBC
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