Analysts raise Intel price target
Credit: Reuters
July 15 (Reuters) - Several analysts raised their price targets on Intel Corp (INTC.O), a day after the chipmaker reported quarterly results and forecast outlook that blew past Wall Street estimates.
Shares of Intel were trading up 7 percent at $18 in midday trade Wednesday on Nasdaq.
The company's strong results lifted shares of chip makers while boosting hopes for an economic recovery and a rebound in technology spending.
Intel is in the early stages of the industry's recovery, has reset its manufacturing and cost structure to generate significant cash flow at lower revenue rates, and continues efforts to diversify into markets outside the current PC structure, Stifel Nicolaus analyst Cody Acree said in a note.
Second quarter margins came in ahead of even whisper expectations and third quarter outlook of 53 percent should satiate most investors, Wedbush analyst Patrick Wang said in a note.
Gross margins are expected to continue their expansion in the third quarter, driven by increasing factory utilization, Canaccord Adams' Bobby Burleson said.
"Product mix is likely to improve as well, as netbook production flattens and traditional notebook production drives units in third quarter," the analyst said in a note.
The company forecast third-quarter gross margin at 53 percent, plus or minus 2 percentage points, an improvement from the second quarter's 51 percent.
Intel projected third-quarter revenue at $8.1 billion to $8.9 billion, compared with analysts' average forecast of $7.8 billion, according to Reuters Estimates. [nN14260734]
A combination of higher utilization, lower unit costs, and lower start-up costs more than offset the impact of lower average selling prices, Citigroup analyst Glen Yeung wrote in a note.
All brokerage had a "buy" rating on Intel stock, except Jefferies, which recommended a "sell" citing slower growth in sales of desktops and laptops, and the company's disappointing efforts in new end markets, specifically smartphones.
The following table lists the price target changes made on Intel: Brokerage Price Target Rating
New Old Deutsche Bank $22 $18 Buy Jefferies $12 $10 Underperform Collins Stewart $20 $18 Buy Stifel $21 $19 Buy Canaccord Adams $20 $17 Buy Wedbush $21 $19 Outperform Citigroup $23 $21 Buy S&P Equity Research $21 $18 Buy Credit Suisse $22 $18 Outperform Raymond James $21 $18 Outperform UBS $21 $18 Buy
(Reporting by Mansi Dutta in Bangalore; Editing by Unnikrishnan Nair)
((mansi.dutta@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: mansi.dutta.thomsonreuters.com@reuters.net)) Keywords: INTEL/RESEARCH DEUTSCHE
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