Intel (INTC) Mobile Could See a Dramatic Improvement in Profitability - Sterne Agee CRT
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Douglas Freedman from Sterne Agee CRT is making a bold call and saying that Intel's (NASDAQ: INTC) Mobile business unit is finally starting to see the light of day. He believes Intel is preparing to ramp material production of its 7360 modem chipset in mid-2016. As a result, he is adding $850M worth of incremental modem sales and $500M from an extra 1-week benefit in 2016, adding $0.11 to 2016 EPS.
Based on his conversations with supply chain partners, he believes INTC has been prepping its supply chain for the 7360 modem chipset with potential production running between 10M-30M unit a month. Freedman estimates this will translate into production of 15M units/month at ASP of between $12 to $15 leading to the $850 in incremental revenue.
The increased modem sales could reduce the mobility losses by an additional ~$400M in 2016, adding to the impact from improved cost structure of tablet products.
He reiterated his Buy rating and $38 PT.
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 $33.84 yesterday.
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