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What You Might've Missed From Intel's Investor Day

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  • Shares of Intel Corporation (NASDAQ: INTC) have been volatile in 2015 and are down 5 percent year-to-date.
  • Credit Suisse’s John W. Pitzer maintained an Outperform rating on the company, with a price target of $40.
  • Intel’s diversification strategy has enabled the company to reduce its dependence on the PC business, Pitzer stated.

Intel is currently executing a diversification strategy aimed at reducing its dependence on PCs. The company, at its annual Investor Day, reported in-line financial metrics with CY16 DCG revenue growth of 15 percent and an additional $800 million reduction in its Mobile losses for the year.

Analyst John Pitzer mentioned that Intel now generates about 40 percent of its revenues and 65 percent of its operating income from its non-PC business. This compares with the four year ago level of 34 percent revenues and 15 percent operating income from the non-PC business.

“While operating leverage was perhaps less than we hoped in CY16 – with much of the Mobile savings being re-invested in DCG, IoTG and tech development – we continue to see INTC’s willingness to de-emphasize “financial-engineering” to focus on investment and innovation as a strength, not a weakness,” Pitzer wrote.

Intel’s Silicon continues to be a foundational technology with barriers to entry which make it a unique asset, the analyst said, while adding that the company continues to have a longer term earnings power over $4.

Latest Ratings for INTC

DateFirmActionFromTo
Apr 2021Raymond JamesDowngradesMarket PerformUnderperform
Mar 2021DZ BankUpgradesHoldBuy
Mar 2021JefferiesMaintainsHold

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Posted-In: Credit Suisse John W. PitzerAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

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