Analysts up Intel target, say chip-gear makers to gain
Credit: Reuters
* JP Morgan, UBS, RBC up Intel targets
* JP Morgan says chip sales view "too optimistic"
* BofA, Stifel raise targets on chip-gear makers
* KLA-Tencor, Applied Materials rise
(Recasts; adds details, analyst comments, shareS)
Jan 14 (Reuters) - Analysts moved quickly to raise price targets on Intel Corp's (INTC.O) shares and took a favorable view on several chip-gear makers, taking their cue from the tech bellwether's strong forecast and capex outlook.
Intel's first-quarter outlook was well above normal seasonality, driven mostly by its belief that its new Sandy Bridge microprocessors will drive increased PC demand, J.P. Morgan Securities said in a note to clients, and raised its price target on the stock to $20.50 from $17.
However, the brokerage kept its "neutral" rating on the stock, saying "Intel is too optimistic in assuming its new processor will drive higher PC demand."
Intel posted an 8 percent increase in fourth-quarter revenue and said it expects to spend $9 billion (plus or minus $300 million) in 2011. [ID:nN13239448]
Brokerages UBS and RBC Capital Markets also lifted their targets on Intel stock and maintained their top ratings.
For a summary of rating and price-target changes, click on [ID:nSGE70D06W]
Bank of America Merrill Lynch raised its price targets on stocks of semiconductor equipment companies such as Applied Materials (AMAT.O) and KLA-Tencor Corp (KLAC.O) among others, based on Intel's capital spending outlook.
Most front-end midcap chip-gear makers have exposure to Intel's capital expenditure and its plan to double spending is an important indicator of what lies ahead, BoFA analysts said.
They expect Intel's suppliers Cymer Inc (CYMI.O) and Varian Semiconductor VSEA.O to also benefit from the spending raise.
Stifel Nicolaus also raised price targets on Applied Materials and KLA stock.
Intel shares fell about a percent to $21.09 on Friday morning on Nasdaq.
Shares of Applied Materials rose 5 percent to $14.95 while KLA-Tencor shares rose 7 percent to $42.60.
The Thomson Reuters G7 semiconductor equipment and testing industry index .TRXFLDG7PUSEME was up about 3.5 percent.
(Reporting by Supantha Mukherjee and Siddharth Cavale in Bangalore; Editing by Sriraj Kalluvila, Unnikrishnan Nair)
((supantha.mukherjee@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters messaging: supantha.mukherjee.reuters.com@reuters.net)) Keywords: INTEL/RESEARCH
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