Market Overview

Goldman Sachs Concerned About Intel's Lack Of Growth, PC Business

Goldman Sachs Concerned About Intel's Lack Of Growth, PC Business
Related INTC
Advanced Micro Devices' Q3 Earnings Preview: Mixed Voices From The Street
Technical Alert: Intel Destroyed After Q3 Report
Using VIX In A Stock Portfolio (Seeking Alpha)

Intel Corporation (NASDAQ: INTC) reported its Q3:16 results with a mild beat to expectations, while issuing its Q4:16 guidance below the consensus forecasts.

Goldman Sachs’ Toshiya Hari maintains a Neutral rating on the company, while lowering the price target from $39 to $36.

Disappointing Guidance

For Q3:16, Intel reported revenue of 15,779 million, 1 percent above the consensus and estimate, with GAAP EPS of $0.69, which was ahead of the consensus but in line with the estimate.

The company guided to a revenue decline of 0.5 percent quarter on quarter for Q4:16, with gross margin decline of 230 bps quarter on quarter to 61 percent.

On The Sidelines

Hari prefers to remain on the sidelines following the disappointing growth in the Data Center Group (DCG) and “lack of conviction on 2017 PC trends.”

The analyst expressed concern regarding the continued weakness in the enterprise segment, mentioning that while DCG accelerated to 10 percent year-on-year growth in Q3, Intel lowered its full-year guidance to high-single-digit growth, from the earlier low-double-digit growth, citing enterprise headwinds.

Related Link: Intel's Q4 Guidance Is Conservative

“Growth in comms and cloud service provider remained strong, but we believe continued sluggishness in enterprise could weigh on broader DCG relative to Street expectations,” Hari stated.

The analyst also expressed concern regarding uncertainty regarding PC end market demand, pointing to the company’s below seasonal guidance for Q4 and management commentary.

“We continue to look for sustained evidence of better underlying PC demand before turning more positive,” Hari added.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for INTC

Oct 2016Charter EquityUpgradesMarket PerformBuy
Oct 2016Deutsche BankMaintainsBuy
Oct 2016NomuraMaintainsBuy

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings News Guidance Price Target Reiteration Analyst Ratings Tech Best of Benzinga


Related Articles (INTC)

View Comments and Join the Discussion!