Nvidia Profit View Lowered at ThinkEquity

ThinkEquity lowered its profit estimate of Nvidia Corp (NASDAQ: NVDA) citing lower PC graphics growth.

The brokerage trimmed its fiscal 2012 earnings forecast for Nvidia to $1.10 a share from $1.18 a share. Wall Street expects the graphics chip maker to earn $1.04 a share for fiscal 2012, according to analysts polled by Thomson Reuters.

...we believe the non-Apple tablet market is nascent and fragmented and slowing consumer PC market growth may be worsened by supply bottlenecks due to the Japan earthquake, analyst Krishna Shankar wrote in a note to clients.

Shankar, who maintained his hold rating, cut his price target on Nvidia stock to $18 from $24.

PC industry growth appears to be slowing, especially in developed consumer markets, and supply bottlenecks in silicon wafers, chemicals, displays, batteries, etc. due to the Japan earthquake may stunt PC, tablet, smartphone growth.

The analyst also cautioned investors that the non-Apple tablet/smartphone processor market is nascent and fragmented, with competition from Texas Instruments (NYSE: TXN), Qualcomm (NASDAQ: QCOM), Intel (NASDAQ: INTC), Broadcom (NASDAQ: BRCM) and Marvell Technology (NASDAQ: MRVL).

However, Shankar said Nvidia appears to have good momentum in high-end PC graphics and multiple tegra 2 tablet/smartphone design wins with multiple customer ramps such as Acer, Asustek, Toshiba, Dell (NASDAQ: DELL) etc. and production ramp with the quad-core tegra 3 expected in the second half of calendar year 2011..

Shankar expects shipment of 21.4 million Tegra units in fiscal 2012 at a blended average selling price of $18 to yield revenues of $385 million from smartphones and tablet platforms.

The analyst is also assuming robust growth in tablet/smartphone platforms, marketshare gains in high-end discrete PC graphics, and continued dominance in professional solutions.

Shares of Nvidia closed Tuesday's regular trading session at $19.17 on Nasdaq.