Wedbush Reaffirms Outperform On Nvidia Following Lawsuit Against Qualcomm And Samsung


In a research note published Monday, Wedbush analyst Betsy Van Hees reaffirmed an Outperform rating on Nvidia (NASDAQ:NVDA) with a $23 price target, following NVDA’s lawsuit against Qualcomm (NASDAQ:QCOM) and Samsung (OTC:SSNLF) for patent infringement.

Van Hees wrote, “NVDA believes eight Samsung products violate patents. NVDA has identified 8Samsung products (Galaxy Note Edge, Galaxy Note 4, Galaxy S5, Galaxy Note 3 Galaxy S4, Galaxy Tab S, Galaxy Note Pro & Galaxy Tab 2) that include QCOM’s processors (Snapdragon S4, 400, 600, 800, 801 & 805) and others that use Samsung’s Exynos, which incorporate IP that NVDA believes violates its patents.” Van Hees continued, “While this will likely take years to play out in the courts, as the innovator of GPU technology, we have a very high level of confidence that NVDA will have the same success it had with INTC. NVDA didn’t identify past and future monetary damages, leaving this up to the court to determine. We believe given the sizes/markets addressed by Samsung and QCOM that the royalty received from INTC ($66MM a qtr.) is a solid benchmark that the court can use if they find in favor of NVDA. NVDA is trading at its 52-wk high, but with the company executing on all fronts, multiple tailwinds, and this big shot across the bow to other OEM’s and suppliers that NVDA will do what is necessary to monetize/protect its IP, we see continued upside to the stock and recommend investors buy shares. Our 12-mos PT of $23 is based upon about 15x our CY:15 pro forma EPS estimate of $1.18 plus $5.26 of net cash per share.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Betsy Van Hees has a total average return of 23.7% and a 78% success rate. Van Hees has a 10.7% average return when recommending NVDA, and is ranked #236 out of 3273 analysts.

 

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