Nvidia shares get target price boost from Citi, Argus analysts
Citi and Argus equity researchers recently raised their fair value estimates on the stock by 31% and 23% respectively.
- Nvidia Corp share price is down by nearly 4% this week
- The decline came despite recent target price upgrades from Citi and Argus analysts
- The largest chipmaker in the US officially began trading on a split basis last Tuesday (20 July 2021)
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What are analysts’ latest thoughts on Nvidia?
Nvidia shares have fallen some 4% since the start of the week, amidst cautiousness and some profit-taking by investors ahead of US big tech earnings this week.
The decline also came after Citi, Argus and Oppenheimer analysts revised their price targets on the semiconductor stock higher last week.
Argus analyst Jim Kelleher lifted his firm’s split-adjusted price target on Nvidia shares to US$230 from US$175 while reiterating a ‘buy’ rating on 23 July.
The analyst wrote that demand for Nvidia’s data centre and gaming solutions remains high even though the pandemic is starting to show signs of a retreat. He added that the company’s automotive business, which was hit by an internal strategic shift and pandemic-related closures of OEM plants, is now ‘on the cusp of a major growth phase’.
Citi analyst Atif Malik also upped his firm's price target on Nvidia to US$223 from US$180 while keeping a ‘buy’ call.
Malik opined that any cryptocurrency-driven gaming pull back in the second half of 2021 would present a buying opportunity into the upcoming product cycle of the Ampere Next Gaming Processing Unit in 2022, as well as that of Grace CPU in early 2023.
Meanwhile, Oppenheimer analyst Rick Schafer’s split-adjusted target price came in at US$235.
Schafer, whose rating on the shares remains at ‘outperform’ as of 20 July, said his ‘structural growth thesis’ and model remains unchanged because of its market-leading position in high performance gaming and artificial intelligence accelerators.
Across the board, the stock has a majority ‘buy’ rating and price target of US$185.02, based on the latest data published by MarketBeat.
Nvidia shares go four-for-one
The US’ largest chipmaker began trading on a split-adjusted price of US$187 on Tuesday (20 July 2021). The price had been based on the company’s final pre-split trading price of US$751 on 19 July.
It then closed the week 4.6% higher at US$195.60 a share.
Nvidia first revealed its intentions for a four-for-one stock split, in which shareholders would receive three additional shares for every common stock owned, in its first-quarter 2021 earnings release.
Its reason for the split was to make its shares ‘more accessible to investors and employees’.
CNBC anchor and The Street founder Jim Cramer had said the stock split ‘does nothing’ in making Nvidia’s shares more appealing, adding that investors should only buy into a stock based on a company’s fundamentals.
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*Based on revenue excluding FX (published financial statements, June 2020)
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