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Intel's Risk/Reward Is Not Good, According To Citi

Intel's Risk/Reward Is Not Good, According To Citi
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Citi’s Christopher Danely believes the risk/reward on Intel Corporation (NASDAQ: INTC) is “not good,” given that margins and business conditions seemed to have, and expressed concern regarding high inventory.

Danely maintained a Neutral rating on the company, while lowering the price target from $38 to $36.

Related Link: Intel Beats On Earnings, Shares Fall 4%

Intel reported its Q3 2016 results, with sales of $15.8 billion, representing 17 percent quarter-on-quarter growth, and well ahead of the preannouncement and normal seasonality, driven mostly by PC restocking.

Gross margin grew 290 bps quarter-on-quarter to 64.8 percent, beating the estimate and guidance, driven by lower costs and higher revenue.

The EPS came in at $0.78, ahead of the estimate and consensus, driven by higher margins and revenue.

Guidance Disappointing

Intel provided Q4 2016 guidance below expectations, driven by PC component de-stocking and weakening data center growth.

The company guided to Q4 2016 revenue of $15.7 billion, below the estimate and consensus, driven by “inventory burn in the PC end market and slowing growth in its high-margin data center business,” the analyst mentioned.

Gross margins were guided to 63 percent, representing a 180 bps quarter-on-quarter decline, in line with the previous estimate and consensus expectations.

The C16 revenue estimate has been lowered, while the EPS estimate has been raised, following the Q3 upside.

Latest Ratings for INTC

Nov 2017Canaccord GenuityMaintainsHold
Nov 2017BarclaysMaintainsOverweight
Oct 2017BMO CapitalUpgradesMarket PerformOutperform

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

Posted-In: Christopher Danely CitiAnalyst Color Price Target Analyst Ratings Best of Benzinga


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