Sterne Agee CRT Reiterates Buy on Intel (INTC) Following Soft 1Q Outlook

Sterne Agee CRT reiterated a Buy rating and $38.00 price target on Intel (NASDAQ: INTC) following the company's 4Q earnings and outlook. Excluding $400M ALTR contribution, Q1 revenue guidance of $14.1B is at the low end of seasonal range. Management cited macro softness for lower unit sell-through, particularly in China, even as PC ASP trends were favorable.

Analyst Douglas Freedman commented, "INTC's Q1 outlook was softer than expected as an extra week and the addition of Altera were not enough to offset softer core business conditions. In addition, there was a change of depreciation schedule, and higher-than-expected opex. That said, the worst should be priced in and we continue to like INTC as a defensive play in our semi coverage due to its strong positions in the markets it serves. Macro headwinds remain the concerns, but lowered Q1 outlook actually set the stage for easy comp in 2016 as we see opportunities for margin improvements from DCG growth, improved PC ASP, and lower depreciation. We remain buyers of INTC with PT of $38, or 13.6x 2017 non-GAAP EPS estimate of $2.80."

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 $32.74 yesterday.

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