A big hit to the downside today for NVDA. Price down from 160.15 to 138.01(-13.8%).
Here is an article on analysts projections.
Nvidia sales warning sends analysts scrambling to slash projections
4:12 PM ET 1/28/19 | MarketWatch
'Ouch' says one analyst after chip maker cuts fourth-quarter outlook for second time in three months
Analysts scrambled to cut price targets on Nvidia Corp.'s stock Monday following a warning that sales for the recent holiday quarter would come in below even previously reduced expectations.
On Monday, Nvidia (NVDA) slashed its revenue forecast for the December-ended quarter by about half a billion dollars (http://www.marketwatch.com/story/nvidia-stock-plunges-toward-worst-day-in-a-decade-after-warning-of-huge-revenue-miss-2019-01-28) because of weakness in China, along with slow sales of its new Turing-based gaming cards and data-center chip sets. Nvidia's stock dropped and closed down nearly 14% at $138.01, or about 53% off its 52-week high of $292.76 set on Oct. 2.
That reduced forecast is in addition to Nvidia cutting its forecast for the fourth quarter back in November (http://www.marketwatch.com/story/nvidia-has-a-pascal-problem-and-its-stock-is-plunging-after-earnings-2018-11-15) because of excess inventory of its previous-generation Pascal architecture-based gaming cards.
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In response, Raymond James analyst Chris Caso, who has an outperform rating on Nvidia, slashed his price target to $165 from $250 in a note entitled "Ouch."
Caso said that while new gaming-card sales are partly based on macroeconomic issues, Nvidia's "failure to attract enough developer support for both ray tracing and [Deep Learning Super Sample tech]" are the company's "misexecution." The analyst also noted his checks were "somewhat mixed" when it came to data-center sales, given the slowdown seen in the most recent earnings report from Intel Corp (http://www.marketwatch.com/story/intel-stock-drops-after-earnings-show-weak-outlook-revenue-miss-2019-01-24).(INTC) .
Cowen analyst Matthew Ramsay, who has an outperform rating, cut his price target to $215 from $265 and called Nvidia's outlook "more than a post-crypto hiccup."
"Channel was not going to clear quickly and the Turing launch has been bumpy, but the magnitude of the miss is shocking given mid-range Pascal was already zeroed," Ramsay said. "Post Intel's guide, softer [data center] sales not a huge surprise, but will have investors re-examining [long-term] expectations. Reset is painful, but needed."
Benchmark analyst Gary Mobley, who has a buy rating on Nvidia, lowered his price target again to $190 from $240 but said he still believes that Turing cards will catch on as the company's Pascal inventory clears out.
"This clearing of inventory, combined with the 40 notebooks and the 30+ game titles supporting the RTX 2060 ray tracing and AI features coming to market in the coming few months should set up Nvidia for a major Turing product cycle in consumer gaming," Mobley wrote.
In a note entitled "We Knew It was Coming, Just Not This Bad," Evercore ISI analyst C.J. Muse, who has an outperform rating, cut his price target to $200 from $275.
"While shares and fundamentals are at a trough, the trajectory of recovery remains difficult to model as of now, and we think it will take a few quarters for Nvidia to regain any growth valuation premium after missing consensus expectations by this magnitude," Muse said.
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Mizuho analyst Vijay Rakesh, who has a buy rating, cut his price target to $200 from $230 and said with "limited visibility on inventory levels and catalysts, Nvidia could trade sideways till we get more clarity around its earnings report Feb. 14."
Jefferies analyst Mark Lipacis, who has a buy rating, held on to his $246 price target after removing Nvidia from his "franchise pick list" last week (http://www.marketwatch.com/story/nvidia-stock-falls-after-jefferies-removes-franchise-pick-label-2019-01-25). Lipacis said his data shows that data-center growth over the last five quarters has been running "well above" long-term growth of 13% and that a pause is to be expected.
"This data shows that previous periods of above trend line spend took 2-to-4 quarters to digest in aggregate, and we think that will be the case this cycle as well," Lipacis said. "Based on the secular drivers for parallel processing, we expect Nvidia to rebound faster than the aggregate."
Bernstein analyst Stacy Rasgon, who has an outperform rating on Nvidia, said the stock is "likely to be dead money" until he can get a read on the second half of the year. Rasgon, who last had a price target of $250, said he "will be out with revised estimates in the near future."
"The current situation is whipsawing the company as they have gotten caught up in a perfect storm with cryptobubble collapse, geopolitical fallout, and cloud slowdowns, as well as a gaming industry that has been slower to embrace their new features," Rasgon said. "And while we had hoped that last quarter's significant cut would do the trick, the old adage seems true; there is never only one cut."
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Among other analysts: Oppenheimer analyst Rick Schafer cut his price target to $190 from $250, Susquehanna Financial's Christopher Rolland cut his price target to $170 from $210 and FBN Securities analyst Shebly Seyrafi reduced his target to $175 from $210.
At last check, Wall Street had an average $215.75 price target on Nvidia shares, down from an average $225.83 at the end of December, according to FactSet data. Of the 35 analysts who cover Nvidia, 23 have buy ratings, 10 have hold ratings and two have sell ratings. |
