Intel (INTC) Analyst Day Better than Feared - Sterne Agee CRT

At analyst day, Intel (NASDAQ: INTC) reiterating its growth focus on the non-PC businesses. The company highlighted multiple growth opportunities in data center, Internet of Things and SSG that are becoming more pivotal factors for substantial revenue growth and margin expansion going forward, as the consumer group continues to see a declining total addressable market. INTC highlighted non-consumer group segments make up 40% of total revenue in 2015 while contributing 65% of the operating profit.

INTC reiterated its long term CAGR target of 15% for DCG and guiding revenue growth of midteens % in 2016 with operating profit growth of low double digits. Management noted the ongoing weakness in traditional enterprise market but continued to expect strong growth to be driven by robust demands in cloud service provider and high performance computing.

2016 outlook inline with the street, which is incrementally positive. INTC guided 2016 revenue growth to be mid-single digits, which implies a value of $58.0B at the mid-point, slightly above the consensus estimate of $57.5B.

2016 capex guidance is now $10B at the midpoint, wihch includes $1.5B for memory, considerably lower than feared.

Sterne Agee CRT analyst, Doug Freedman, thinks the stock will act well on the increased dividend and $10B capex, which the market was expecting to be above $10B.

No change to Buy rating and $38 PT.

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 $34.30 yesterday.

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