RBC Capital upgrades Nvidia (NVDA) to outperform from sector perform.
Analyst Steven Arthur says fourth-quarter earnings per share is ahead of estimates. He notes the company guided first-quarter revenues flat to 5%-plus sequentially, vs. a typical seasonal decline of 5% to 8%.
He says this is well ahead of prior first-quarter forecast and consensus estimates. He ups his 92 cents fiscal 2006 (ending January) earnings per share estimate to $1.16 and $1.21 fiscal 2007 earnings per share to $1.58.
Arthur thinks Nvidia has staged a remarkable recovery from its low of last August -- both in terms of operating performance and share price. He believes despite recent strength, Nvidia is attractively valued at 22 times calendar year 2005 earnings per share estimate, and 16 times calendar year 2006. He raises his $29 target to $36.