UPDATE: FBR Capital Markets Upgrades Intel to Outperform Ahead of Haswell Public Debut

In a report published Monday, FBR Capital Markets analyst Christopher Rolland upgraded the rating on Intel INTC from Market Perform to Outperform, and raised the price target from $23.00 to $28.00.

In the report, FBR Capital Markets noted, “On the eve of Computex and the public debut for ‘Haswell,' we acknowledge the challenges ahead for Intel in the PC market, but now believe the company has added more than enough new avenues of growth to replace lost PC units. Additionally, in our discussions with engineers intimately involved in the handset design process, they have unanimously expressed a renewed interest in Intel's mobile SoCs, owing to expected power and performance advancements in the upcoming Silvermont SoCs. Additionally, our comprehensive research into microservers now gives us confidence in the company's defensibility of the server market. In addition to advances in Atom, the company's recent thrust into new markets like networking, foundry, and many others expands Intel's total addressable market from just ~$70 billion in PC and server to something closer to ~$200 billion. While some investors have spurned Intel's lofty capex guidance, we think it signifies something more than just growing capital intensity and represents the company's confidence in penetrating these new markets. While headwinds in PC are discouraging, computing form factors will change. However, we believe Moore's Law is considerably more durable and presents as good a business plan as any in the technology industry. Moving forward, we are increasingly confident that Intel can opportunistically extract value from the extra transistors afforded to it through the best silicon manufacturing operations in the world, and therefore we are upgrading INTC from Market Perform to Outperform and raising our price target from $23 to $28, representing 14x our 2014 GAAP EPS estimate.”

Intel closed on Friday at $24.28.