UBS Raises Price Target on Intel (INTC) to $43 Ahead of 3Q Report
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UBS reiterated a Buy rating on Intel (NASDAQ: INTC), and raised the price target to $43.00 (from $40.00), ahead of the company's 3Q earnings report. UBS believes that the company's stock will continue its positive momentum if Intel executes well in 3Q16 and reports y/y data center sales growth of 15%. Intel's new 3Q16 sales guidance is $15.6B versus its prior guidance of $14.9B.
Analyst Stephen Chin commented, "We keep a Buy rating as better PC sales remain a key driver for the stock as we estimate PCs are still 53% of Intel's total sales. Intel reported its total 3Q16 sales would be higher than its original guidance by $700M, or 5%. We estimate Intel's 3Q16 PC sales will be up 12% q/q. One outstanding question is whether this was a 1-time benefit or the result of better consumer interest in new products/replacement of older PCs. If PC ODM sales are not up as strong, this may have been a 1-time benefit. Intel's prior PC shipment guidance for full year 2016 was down high single digits % y/y. The company did not provide an update today, but our global team estimates 2016 PC units will be down -9% y/y with 2017 down -2% and 2018 up +1%. We estimate Intel can still grow its EPS by 10% as long as it generates relatively flat PC sales and executes well in its data center, FPGA, memory and IOT business segments."
Shares of Intel closed at $37.67 yesterday.
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