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Major Decision at Intel (INTC) Will Shape Future of Industry

April 10, 2013 1:41 PM EDT Send to a Friend
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Intel's (Nasdaq: INTC) board is expected to name a successor to CEO Paul Otellini before its May 16th annual meeting. If so it will be the biggest change at Intel in 10 years and the most important decision Intel has made since 300mm, thinks RBC Capital analyst Doug Freedman. Considering declining PC demand, the decision is also seen as important to the entire semiconductor industry, since the new CEO's vision will help shape its future.

"Currently, the lack of CEO succession is a huge issue for our investment thesis. We need to have a firm grasp on the direction the new CEO is targeting before we are able to offer conviction for large scale investment," said Freedman.

Otellini had a deep understanding of the PC market and this gave him an advantage in succeeding Craig Barrett in 2005. However, the next candidate will need to grow not one but all areas of Intel, including mobile, data center, software and foundry, and may come from a mobile or customer-centric background.

"Unlike in years past where Otellini and the other Intel CEOs (Andy Grove, Craig Barrett) have all been promoted from within, this time could be different given the growth avenues are needed outside of PCs, including mobile, software, foundry, etc," said Freedman

His partial list of candidates includes Sanjay Jha, Warren East, Patrick Gelsinger, Brian Krzanich, Stacy Smith, Andy Bryant, Renee James and David Perlmutter.

RBC Capital has a Sector Perform rating on Intel with a price target of $24.00

For an analyst ratings summary and ratings history on Intel (NASDAQ: INTC) click here. For more ratings news on Intel click here.

Shares of Intel closed at $21.75 yesterday.




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