Replies to post #55677 on Intel Corp (INTC)

[drjohn]

What the ...; they downgrade and then they up earnings?

[Koog]

re: what are we to make of this?

Well, I sure can't make sense of it. Am I to understand that the B of A analyst, Sumit Dhanda, downgraded INTC saying "it is unlikely to serve as a sufficient offset to weak seasonality in the first half of 2008.

Bottom line, the stock moves on expectations for gross margin and EPS upside. Barring a scenario which results in upside in PC demand, he thinks the fourth quarter will mark the last quarter of meaningful upward revisions suggesting limited upside to stock."

Then the (I suppose) same analyst says this 3-4 days later:

"Banc of America Securities said it raised its earnings estimates on chipmaker Intel Corp. (INTC.O: Quote, Profile, Research) to 27 cents a share from 26 cents for the fourth quarter and to $1.27 a share from $1.25 for 2007.

The brokerage said its industry and channel checks suggest that Intel benefited from a strong uptake of Core 2 Duo mobile processors and the momentum in servers, driven in part by market-share gains versus Advanced Micro Devices Inc."

What the heck does he think is supposed to happen? Just makes no sense at all!

[Sarmad]

>> what are we to make of this?

Raising the EPS estimate was in the same note as downgrading the stock.

What th eanalyst meant to say is that the stock goes up in H2, and does not go up in H1 due to seasonal factors. He had a target of 30 or 32 because he expected it to be reached at year-end '07. When the stock ended the year at 27, he figured it will not resume upward movement until H2 '08. So he rated it neutral. Since general market looks unhealthy, he figured a dollar of downside is likely. So changed his target to 26.

Sumit did not tell fund managers to jump off a cliff. he merely said PC stocks react to EPS, and EPS does not rise in H1 above what it is in q4. Fund managers took this to mean they should act stupid. it was not Sumit's fault.

[VistaViewer]

techno_bull, That BofA analyst's report is dated Jan 4, 2007

So the reference to 4th qtr estimate is probably for 2006. Read it carefully. It says "...Intel's Q4, 2007 earnings..."; NOT specifically referencing Q4 2007, but 2006, and total 2007 earnings. IMO.

http://uk.reuters.com/article/governmentFilingsNews/idUKWNA192520070104

Over a year old? So not relevant now? Or do I have this completely wrong?

A more up-to-date estimate is from EarningsWhisper.com of .41 vs consensus of .40 for Q4 2007. I like this number much better.

http://www.earningswhisper.com/stocks.asp?symbol=intc

Incidently, Intel has a long record of Earnings Suprises to the upside. My guess is that Q4 qtr 2007 earnings will be closer to .45-.50

Just my opinion...

VV