Deutsche Bank Offers Preview Ahead Of Intel's Analyst Day

• The share price of Intel Corporation INTC has appreciated 12.04 percent in the last three months, with a high of $34.90 on October 23.
• Deutsche Bank’s Ross Seymore has maintained a Buy rating on the company, with a price target of $37.
• Seymore expects the company to issue its 2016 guidance in-line with consensus, with revenues growing in the low single digits year on year.

Analyst Ross Seymore to guide to year on year flat to down CCG revenues, with DCG revenue rising 15 percent. Gross margins are expected to remain flat year on year, with improved volume and cost mix offsetting the higher 10nm startup costs.

Opex is expected to decline marginally, year on year, while the EPS is expected to come in marginally above the consensus. Following the push-out of 10nm to 2H17, Seymore expects Intel to explain its process technology roadmap and competitive positioning.

“Overall, we believe the 10nm delay was due to both mounting technological challenges and Intel’s need to realign its tech deployment with customer product launches,” the Deutsche Bank report stated, while mentioning that Intel was likely to “return to a two-year cadence at 7nm.”

Seymore also expects the company to discuss the roadmap for its Mobile business and how it plans to reduce segment losses. Intel is also likely to offer more details regarding its Memory business, especially related to its Dalian, China, fab.

While expecting higher capex guide for 2017 to pressure the stock in the near term, Seymore believes that any weakness in the stock would offer a buying opportunity, given that the company usually spends lower than its capex guidance.