NVIDIA Corp (NVDA)

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Nvidia Analysts Cut Price Targets After ‘Ugly’ Results, But Some Still Say Buy the Stock
By: Barron's | August 25, 2022

Wall Street analysts aren’t ready to give up on Nvidia yet—even after the company has reduced its outlook versus analysts’ estimates three times over the last few months.

On Wednesday, Nvidia (ticker: NVDA) reported fiscal second-quarter earnings roughly in line with its preannouncement it had issued earlier this month. The company also gave a revenue forecast for the October quarter that was significantly below expectations, citing a difficult macroeconomic environment and a rapid slowdown of demand.

Benchmark analyst Cody Acree lowered his target for the stock’s price to $215 from $228, but reiterated his Buy Rating for the stock.

“We believe NVDA’s report and outlook was about as bad as expected following its pre-announcement,” he wrote. “With this print and outlook likely being the low-water mark for this year’s results, we recommend investors use any significant share price weakness as an opportunity to build positions.”

Nvidia shares rose 1.5% to $174.79 in early trading Thursday.

In a separate note, Bernstein was similarly optimistic over Nvidia’s longer-term opportunities after the recent string of bad news. Analyst Stacy Rasgon reaffirmed his Outperform rating and $210 stock price target.

“Investors likely suspected FQ3 had the potential to be somewhat ugly. And it was, much lower than the (still somewhat noisy) revised consensus expectations,” he wrote. “Investors looking for a de-risked profile have much to grab onto.”

Rasgon lowered his fiscal 2023 earnings estimate for Nvidia to $3.39 a share from $3.64.

But not everyone on Wall Street is as positive. Wedbush analyst Matt Bryson reiterated his Neutral rating for the chip maker and reduced his price target to $160 from $190. He cited the uncertainty surrounding its enterprise and cloud-computing business.

“We believe it remains unclear as to how NVDA’s Data Center revenue will grow through the intermediate term,” he wrote.

Nvidia’s stock has declined by about 40% this year, versus the 25% drop in the iShares Semiconductor ETF (SOXX), which tracks the performance of the ICE Semiconductor Index.

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