Market Overview

Intel Boasts Zero Near-Term Negative Catalysts, Raymond James Says In Upgrade

Share:
Intel Boasts Zero Near-Term Negative Catalysts, Raymond James Says In Upgrade

Shares of Intel Corporation (NASDAQ: INTC) have "performed well" lately, and Raymond James said in a Monday note that the  Silicon Valley company has zero negative catalysts on the horizon that would prompt Wall Street to revise estimates lower.

The Analyst

Raymond James' Chris Caso upgraded Intel from Underperform to Market Perform with no assigned price target.

The Thesis

Intel did a "good job" in providing its 2018 guidance, which implies an ongoing low-single digit decline in the PC business and high-single digit growth in the data center group, Caso said in the upgrade note.

The company will see "very strong growth" in memory, and even if the unit falls short of expectations, its low profit profile limits the "damage to earnings" and could even raise gross margins, the analyst said.

Intel is benefiting from an overall improvement in macro conditions, and the ramp of its "Purely" platform is shifting to its second year, Caso said. 

"As such, we don't see [a] plausible catalyst to bring estimates lower in the near-term." 

A shift toward a more bullish stance is not necessarily appropriate: Intel needs to prove the sustainability of its free cash flow in order for bulls to declare victory, the analyst said. This may be difficult to do, as Intel is transitioning away from the PC — which still represents approximately 50 percent of revenue — toward memory, IoT, and automotive businesses that come with a much lower margin profile.

Price Action

Shares of Intel were up 6.32 percent at the close Monday. 

Related Links:

Intel's Earnings Beat: The Sell-Side Weighs In

Intel Upgraded As Valuation Fears Dissipate

Latest Ratings for INTC

DateFirmActionFromTo
Aug 2019UpgradesUnderperformMarket Perform
Aug 2019Initiates Coverage OnHold
Jul 2019MaintainsOutperform

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

Posted-In: Chris Caso Datacenter DCG IoT memoryAnalyst Color Upgrades Analyst Ratings Best of Benzinga

 

Related Articles (INTC)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NVDACascendMaintains220.0
ADBECleveland ResearchInitiates Coverage On283.0
IMOCiBCUpgrades
RETAJefferiesMaintains254.0
SNAPAreteUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

9 Stocks Moving In Monday's After-Hours Session

Friday Never Happened: Dow, S&P 500, Nasdaq Recover Losses In Afternoon Trading