Earnings Beat: Canaccord Shines Light on NVIDIA Corporation (NVDA) and Skyworks Solutions Inc (SWKS)

Canaccord analysts came out today with a few insights on the graphics card giant NVIDIA Corporation (NASDAQ:NVDA) and semiconductors manufacturing giant Skyworks Solutions Inc (NASDAQ:SWKS), following strong earnings results.

NVIDIA Corporation

Shares of NVIDIA soared on Friday after the company posted third-quarter earnings results and guidance ahead of expectations as gaming continues to grow and PC OEM and Quadro segments stabilize.

In reaction, Canaccord analyst Matt Ramsay reiterated a Hold rating on Nvidia, while raising the price target to $30 (from $23), which represents a slight downside potential from current levels.

Ramsay commented: “October quarter results crushed our and consensus estimates driven by gaming GPUs and automotive. Overall, we maintain our belief NVIDIA’s transformation from a PC-leveraged GPU supplier to a diverse visualcomputing company is nearing completion with growth and overall earnings power now driven by the company’s four target growth markets of gaming, enterprise, HPC/ cloud, and automotive. While we have applauded and appreciated the company’s transformation, our fundamental thesis has obviously underestimated the strength of key themes driving NVIDIA’s strong recent results including augmented/virtual reality, eSports, and automotive display/control, as well as the company’s position within these markets.”

The analyst continued, “Given concerns over the imminent end of Intel’s royalty payments, potential convertible debt conversions and premium valuation remain, we remain HOLD rated for now; however, we plan a full re-examination of our fundamental thesis and valuation parameters in light of NVIDIA’s current business trends.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Ramsay has a total average return of -0.3% and a 54.5% success rate. Ramsay is ranked #2758 out of 3827 analysts.

Out of the 18 analysts polled by TipRanks, 8 rate Nvidia Corporation stock a Buy, while 10 rate the stock a Hold. With a downside potential of 8.03%, the stock’s consensus target price stands at $28.87.

Skyworks Solutions Inc

In a research report issued today, Canaccord analyst Michael Walkley reiterated a Buy rating on Skyworks Solutions shares, with a price target of $132, after the company reported better-than-expected results for its fourth quarter of fiscal 2015, and issued guidance ahead of the Street’s consensus.

Walkley wrote, “Despite some weak trends in September quarter global smartphone sales, we believe Skyworks’ strong results and guidance were driven by RF content share in the iPhone 6 and Samsung’s Galaxy S6 smartphones combined with our belief Skyworks gained at least 15% additional content share in the new iPhone 6S smartphones. We also believe growing sales of higher dollar content integrated solutions to Chinese smartphone OEMs contributed to the strong results and guidance. Also, growing traction in its non-handset broad markets business that grew 20% Y/Y in F2015 helped drive the strong results and margins.”

Furthermore, “We believe Skyworks’ broad portfolio of custom integrated solutions should enable dollar content share growth in leading premium tier smartphones from Apple and Samsung and also enable Skyworks to grow content share in the fast growing Chinese LTE smartphone market. We also believe Skyworks’ diverse analog portfolio positions its broad market division for 20% plus annual growth driven by content share in markets such as 802.11ac, wireless infrastructure, and the IoT market.”

According to TipRanks.com, analyst Michael Walkley has a total average return of 17.3% and a 63.5% success rate. Walkley has a 50% average return when recommending SWKS, and is ranked #11 out of 3827 analysts.

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