Replies to post #91726 on Intel Corp (INTC)

[Joey Smith]

Smooth re: I still don't see any significant increase in valuation as the analysts will expect at least that level.

I can see Intel hitting $2+/EPS for full year 2011. Giving a 15 PE, that translates to roughly a $30 stock price. Given Intel's size, analysts should be looking at profit & cash growth, in addition to revenue. What do you see for Intel's share price over the next 2 years?

[wbmw]

I still don't see any significant increase in valuation as the analysts will expect at least that level.

There will of course come greater valuation if Intel were able to successfully grow revenues by 50% in the next few years. How can there not be? Intel is not priced as a $60B business today. Today's market cap of $112B would be < 2 years of revenue if that were the case, and even stocks with traditionally low P/E have a higher price to sales ratio than that.

The answer is that investors do not believe that Intel can be a $60B company. Intel has not yet hit $40B, and though they are on track to hit it this year, I believe investors will wait to see it before they buy shares at a price that would be amenable to higher revenues.