Normura Sees Strong Oulook But Expensive Multiple For Intel

Nomura analyst Romit Shah commented on Intel Corporation (NASDAQ: INTC) after the company hosted an analyst day Thursday.  

Shah noted that “several positive takeaways emerged” which included Intel guiding "CY15 revenue growth to mid-single digit, higher than our estimate and consensus of up 3 percent.”

“PC units are expected to be flat with PC revenue down slightly y-o-y. However, including other devices such as tablets and chromebooks, units are expected to be up next year. Platform ASPs are expected to be up next year owing to increasing mix of data centre revenue,” according to Shah.

“Intel is guiding MCG operating losses to shrink by $800m in 2015 and expects a larger reduction in operating losses in 2016,” according to the analyst note.

“Gross margin for the full-year 2015 is expected to be in the 60-64 percent range. Intel guided capex flat at $11bn, with core capex also flattish in the $7.5bn-$8.0bn range.”

Shah concluded by setting CY 2015E EPS at $2.40 and stating that while the outlook for Intel is strong, the multiple is expensive.

The firm maintained a Neutral rating and $33 price target on the stock.

Intel Corporation recently traded at $36.30, up 0.97 percent.