Bank Of America Highlights On Intel From Asia Analyst Day

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Bank of America recently hosted an analyst and investor day for Intel Corporation INTC in Hong Kong. Below are some highlights from the event, according to analyst Vivek Arya.

1. “Strong PC channel visibility: investors remain cautious, given Intel’s chip shipments have been outpacing PC demand. Intel explained that it stages inventory in hubs and cages at customer manufacturing sites that pull product on real-time basis, so there is very minimal chance of over-shipment.”

2. “Data center sales and pricing drivers. Data center group led by sustainable trends – connected devices, mobile transactions, big-data, cloud. Rising data center ASPs are positive but create concern of saturation.”

3. “Mobile strategy evolving, organically and via partnerships in China. The panel discussion with select Intel tablet customers in China Tech Ecosystem was very illuminating as they positively highlighted Intel’s turnkey model, software/supply chain resources and ability to match customers with sales opportunities.”

4. “Foundry longer-term opportunity: Intel clarified that foundry remains an important but longer-term opportunity. It is NOT dedicating any major capex/capacity to foundry yet, and any success here would be upside to our model.”

The firm’s “bull-case for Intel is based on a $3 EPS power by 2016 (vs. our $2.82, Street’s $2.56), and with multi-year double digit EPS growth driving 15x-20x forward PE, inline with prior periods when Intel had such sustained EPS growth,” according to an analyst note issued Sunday.

The firm maintained a Buy rating on Intel and $43 price target.

Intel recently traded at $36.09, down 0.36 percent.

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Posted In: Analyst ColorAnalyst RatingsBank of AmericaVivek Arya
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