Most of the tech giants have reported Q2 earnings but one marquee name has yet to present its quarterly statement. Next Wednesday, August 19, GPU heavyweight Nvidia (NVDA) will report F2Q21 results.
Nvidia has been one of the main beneficiaries of the viral outbreak’s consequences. The WFH culture and shelter in place measures inadvertently played into Nvidia’s two core strengths – Data Center and Gaming.
Looking ahead to the print, Rosenblatt analyst Hans Mosesmann expects Nvidia to deliver the goods and anticipates the company will post “a slight beat.”
The latest report will also mark the first full quarter in which the impact of newly acquired data specialist Mellanox will come into play.
Driven by the pandemic’s tailwinds, Mosesmann anticipates “continued momentum” in Data Center and with the addition of Mellanox expects “low teens quarter-over-quarter growth.” The 5-star analyst cites “increased demand from work-from-home dynamics, solid backlog and visibility, and strong traction from the new Ampere,” as reasons to be confident in the segment’s performance.
The Mellanox acquisition was a significant milestone and is expected to make up 12% of total revenue, strongly contributing to Data Center growth.
As for Gaming, Mosesmann predicts a “low single-digits quarter-over-quarter uptick,” driven by COVID-19 and the shift to e-tail channels. These will be slightly offset by the closure of retail stores.
Mosesmann also expects Nvidia’s Automotive segment to offset the overall positivity. So do Nvidia management, who have guided for a 40% quarter-over-quarter decline.
But looking ahead, Mosesmann expects Nvidia’s out sized performance (up a whopping 94% year-to-date) to continue and guides for “mid-single-digit q/q growth,” in the October quarter.
Summing up, the 5-star analyst said, “We see Nvidia well positioned to take advantage of key themes/trends over the next few quarters, including continued transition to software defined data center architectures, which includes both Ampere GPU compute momentum and the emergence of data processing (DPUs offloading of traditional CPU workloads) and the new gaming version of the 7nm Ampere GPU.”
Accordingly, Mosesmann reiterated a Buy on NVDA shares alongside a $500 price target. The implication for investors? Upside of 8%. (To watch Mosesmann’s track record, click here)
As far as Nvidia’s rating goes, the rest of the Street and Mosesmann are on the same page. Based on 26 Buys, 3 Holds and 1 Sell, Nvidia boasts a Strong Buy consensus rating. However, where price targets are concerned, the two diverge. Overall, going by the $415 average price target, Mosesmann’s colleagues expects the share price to decline by 9% in the year ahead. (See Nvidia stock analysis on TipRanks)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
To say it hasn’t been a good year for cruise line operators would be underselling the disaster 2020 has been. Amongst a sea of hurting industries, the pain inflicted by the coronavirus on cruise lines has arguably been second to none.
However, following the delivery of its quarterly results on Monday, Royal Caribbean (RCL) shares popped by a handy 16%.
Not that the surge came off the back of an estimate trouncing report. With no meaningful sailing to report in the quarter, revenue dropped year-over-year by a dispiriting 94% to $175 million, although the top line figure did manage to beat the estimates by $17.73 million. No surprise on the bottom line, with a non-GAAP EPS loss of $6.13 missing consensus by $1.58. With the way things stand, Q3 isn’t expected to fare much better, either.
However, the reason behind the uptick concerned the more long-term outlook laid out by the company. Management said 2021 bookings remain “within historical range” of which 60% are new bookings.
For Credit Suisse analyst Benjamin Chaiken this is the key take away from the earnings call. The 5-star analyst remains buoyed by 2021’s bookings, with “cumulative pricing above 2019 levels excluding FCC (future cruise credits).”
Taking the long-term view, Chaiken believes the cost cutting measures will have a lasting and positive effect.
Chaiken said, “Like other companies in travel/leisure RCL, we believe, is in a unique position to exit a more efficient company, with potential room for SG&A to come down... From a sentiment standpoint, we think that cruise is well positioned. Following a few weeks of risk-off, as the market slowly digested the news of spiking COVID cases and its impact on leisure travel, we think expectations are in a much better place and positioning also reflects a more conservative and potentially bumpy road ahead, which is good for the cruise/travel/leisure set-up in our view.”
To this end, Chaiken rates RCL an Outperform (i.e. Buy) along with a $75 price target. This figure implies possible upside of 24%. (To watch Chaiken’s track record, click here)
Among Chaiken’s colleagues, opinions are mixed, resulting in a conflicted outlook. 7 Buys, 8 Holds and 2 Sells add up to a Moderate Buy consensus rating. Meanwhile, the $54.38 average price target implies a 5% downside from current levels. (See RCL stock analysis on TipRanks)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.