Intel Corp (INTC)

[VeeCee]

INTC: Wells, Longbow See Upside on Servers, New Products
By Tiernan Ray

A number of bullish notes emerged this morning on Intel (INTC), some of them prompted by the company’s 10-Q filing for the quarter it reported July 18th, which offered a disappointing revenue view for this quarter, and a reduced outlook for the year, with Intel citing macroeconomic risks and slower-than-expected PC sales.

Regarding the 10-Q, Wells Fargo’s David Wong, who has an Overweight rating on Intel shares and a $33 to $39 “valuation range,” notes that there are “no surprises” as far as additional info on the quarter or the outlook.

However, Wong takes the opportunity to defend Intel’s Q3 view as being better than most:

We think it is notable that Intel has the highest September quarter sequential growth guidance midpoint of various major chip companies we monitor (6% for Intel, compared to, for example, 5.5% for Broadcom, 2.5% for Maxim, and flattish for Qualcomm and TI) . We think that strong new product ramps (Romley-based servers, Ivy-Bridge based ultrabooks, Atom-based Windows 8 tablets perhaps in the fourth quarter) and firm microprocessor pricing trends could help drive Intel’s sales growth in the second half of this year.

Joanne Feeney of Longbow Research reiterates a buy rating on Intel and a $34 price target, writing that she had a meeting this week with the company’s director of IR, Gary Willihnganz, and “came away with further confidence in the company’s near-term prospects and long-term strategic plan.”

Feeney observes that Intel’s likely to perform better than expected in Q4 based on its seeing server microprocessor sales rise by more than 15%. She also sees the company hitting its gross margin target of 64% for this year with the mix of server chip sales.

But Feeney also notes that the company seems very earnest about its competitive position in the tablet computer market going into the fall:

#1 priority for Intel is to return growth to the notebook segment through the advent of Ultrabooks. It sees itself in a fight for a share of the consumer wallet and expects the sleek and powerful UB to compel consumers to refresh aging PCs and to eat into iPad sales. Discussions revealed that Intel powers 40 touch-enabled (Win8) UBs slated for release in 4Q, and is in 135-140 UB designs, all together. Intel continues to expect UBs to comprise 40% of all consumer notebook sales exiting 2012 and highlighted the Toshiba at ~$699 as an example of an affordable and compelling early offering.

Intel shares today are down 18 cents, or 0.7%, at $25.75.
http://blogs.barrons.com/techtraderdaily/2012/08/02/intc-wells-longbow-see-upside-on-servers-new-products/