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Intel's 'Blowout' Q1 Turns KeyBanc Incrementally Bullish

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Intel's 'Blowout' Q1 Turns KeyBanc Incrementally Bullish

Intel Corporation (NASDAQ: INTC) reported first-quarter results Thursday afternoon that KeyBanc Capital Markets described as a "blowout."  

The Analyst

KeyBanc's Michael McConnell maintains an Overweight rating on Intel's stock with a price target lifted from $60 to $65.

The Thesis

Intel's Q1 was highlighted by a notable revenue and EPS beat of $16.1 billion and 87 cents per share versus McConnell's estimates of $15 billion and 70 cents per share, the analyst said in a research report. Beyond the headline numbers, the company showed "impressive" performance in the data center business, where revenue grew 24 percent from one year ago.

Intel's second-quarter revenue guidance of $16.3 billion implies data center growth will continue in the near-term, McConnell said. 

Intel also lifted its 2018 revenue guidance from $65 billion to $67.5 billion, while its EPS guidance was lifted from $3.55 to $3.85, the analyst said. Due to higher sales, the company's operating expenses in 2018 should be 30 percent of sales, which would be a full year ahead of the company's plan, he said. 

The bullish case for Intel remains unchanged after Thursday's print and is based on the following, McConnell said:

  • Data center revenue growth re-accelerating in 2018.
  • Conservative guidance in the client computing and data center segments "de-risks" 2018 expectations.
  • Growth opportunities in networking, memory and Internet of Things.
  • An attractive dividend yield of 2.3 percent.

Price Action

Intel shares were traing up 6.7 percent to $56.61 in premarket trading Friday. 

Related Links:

Bernstein Cautious On Intel, AMD Before Quarterly Prints

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

Latest Ratings for INTC

DateFirmActionFromTo
Dec 2019ReiteratesBuy
Nov 2019MaintainsBuy
Oct 2019MaintainsMarket Perform

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

Posted-In: DCG Internet of ThingsAnalyst Color Earnings News Price Target Reiteration Analyst Ratings Best of Benzinga

 

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