Jefferies Cuts Price Target on Intel (INTC) Following Weak 4Q Outlook

October 19, 2016 7:37 AM EDT
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Jefferies maintained a Buy rating on Intel (NASDAQ: INTC), and cut the price target to $46.00 (from $49.00), following the company's 3Q earnings report. 3Q revs of $15.8 billion increased by 9% YY, and beat the revised outlook of $15.6b. Non-GAAP EPS of $0.80 beat consensus by $0.07, and is the highest quarterly EPS ever reported. However, Intel forecasted 4Q revs flat QQ, which is below the 3-yr average of 2.3%, and gross margins to decline by 180bps QQ due to higher 10nm and memory startup costs.

Analyst Mark Lipacis commented, "3Q Revs and EPS beat recently revised expectations by 1.2% and $0.07. DCG growth reaccelerated to 10%, but a declining Enterprise server business caused INTC to derate its 2016 expectations to "high-single" digits. The 4Q outlook for below seasonal growth and GM decline of 180 bps appears conservative. We lower our estimates and price target, but like the gross margin setup into 2017."

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 $37.75 yesterday.



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