Imperial Capital Starts Intel (INTC) at Outperform

Imperial Capital initiates coverage on Intel (NASDAQ: INTC) with a Outperform rating and a price target of $37.00.

Analyst Ashok Kumar states, "Following the 2Q14 upside preannouncement on 6/12/14, we expect the company to report results consistent with the revised Street non GAAP EPS estimate of $0.52. The revised revenue outlook for 2Q14 was $13.7bn at the mid-point, up from prior outlook of $13.0bn. The mid-point of Intel’s guidance implies 7% yoy and quarter-over-quarter (qoq) growth, or better than seasonal trends. With a richer product mix, gross margins were guided up 100bp to 64%. The better than seasonal revenue performance can be attributed to the ongoing PC replacement cycle in the commercial segment and not just an end-of-life Windows XP event. We see improving sales for both desktop and notebooks PCs from pent up corporate demand and Microsoft’s license fee reduction for value priced PC fueling emerging market sell-through. Intel now expects some yoy revenue growth for 2014 versus prior expectations of flat top line. We believe that current Street 2014 revenue estimate of $54.6bn, up 4%, could prove conservative. The stock remains highly correlated with gross margins. Gross margins for the year are expected to come in the upper half of the prior outlook of 61%, +/- a few points."

For an analyst ratings summary and ratings history on Intel click here. For more ratings news on Intel click here.

Shares of Intel closed at $31.25 yesterday.

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