Intel (INTC) DCG Guidance Slowly Becoming a Show-Me Story - FBR Capital

January 17, 2014 7:40 AM EST
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FBR Capital analyst Christopher Rolland lowered estimates but reiterated his Outperform rating and $27 price target on Intel (NASDAQ: INTC) following ho-hum Q4 results and muted guidance.

"Even though Intel Corporation's 4Q13 revenue was $100M better than the Street and PC revenues were up +2% QOQ (versus the Street's -1% QOQ), disappointing 4Q13 datacenter revenue (+3% QOQ versus Street estimates of +13% QOQ) dampened spirits," Rolland notes. "Even more disappointing, 4Q13 DCG units were down -3% QOQ, as management believes spending was partially disrupted by the federal shutdown (while this sounds like a "bad excuse" we have heard the same from our networking contacts. Also, 1Q14 guidance was just in line with the Street as neither PC nor datacenter were able to shine

He added, "Indeed, we are beginning to question Intel's +15% long-term growth CAGR for DCG as the segment only grew +5% YOY in 2013 and just had its growth pared to low double digits in 2014. That said, while DCG and 1Q14 guidance were disappointing, we continue to believe PC has an opportunity to outperform 2014 guidance and perhaps an outside shot at positive YOY unit growth."

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 $26.67 yesterday.

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