FBR Capital Maintains an 'Outperform' on Intel (INTC); PC Checks Largely Stable but Consumer Shipments Still Sluggish

May 13, 2011 7:21 AM EDT
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FBR Capital maintains an 'Outperform' on Intel (NASDAQ: INTC), PT $27.

FBR analyst says, "Checks with the top six notebook ODMs have remained largely unchanged since last month, with 2Q11 notebook builds set to grow 4.5% QOQ. We hear PC demand has "stabilized" following Intel's Sandy Bridge chipset bug issue, and after Sandy Bridge's channel fill activities in March and April. Specifically, we saw a positive 2Q revision out of Quanta (+5%), and negative revisions out of Hon Hai (–6%), Compal (–4%), and Wistron (–1%). Also, we heard HP (NYSE: HPQ) and Acer have trimmed internal 2Q expectations given still-sluggish consumer demand in the U.S. and Europe, and with Intel's Sandy Bridge not motivating buyers to come out of the woodwork en masse. Despite these somewhat sluggish checks, we still think Intel is seeing goodness in its ASPs and mix, and strength in its server business. While some investors think Intel is forecasting too much good news for 2Q, guiding for normal seasonality off of a channel fill–assisted 1Q, we do think that shares of INTC can still rally above $25 near term as some Sandy Bridge ASP good news embeds into buy- and sellside expectations."

For more ratings news on Intel click here and for the rating history of Intel click here.

Shares of Intel closed at $23.71 yesterday.

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