Canaccord Genuity Raises Price Target on Intel (INTC) After Meeting with Management

Canaccord Genuity reiterated a Buy rating on Intel (NASDAQ: INTC), and raised the price target to $44.00 (from $40.00), after meeting with management. meetings were upbeat and focused on the diversification of DCG opportunities and visibility against stronger 2H/16 guidance in DCG. The meetings also covered the KabyLake launch and overall trends toward PC stabilization longer-term, and the recently announced sale of McAfee.

Analyst Matthew Ramsay commented, "After meeting a broad cross-section of Intel management at recent IDF and Hot Chips conferences, we recently hosted a full day of upbeat investor meetings with Gary Willihnganz from Intel investor relations in Toronto. While overall long-term PC and enterprise server trends are likely to remain mixed, our meetings were generally upbeat with focus on the diversification of DCG opportunities and visibility against stronger 2H/16 guidance in DCG, the KabyLake launch and overall trends toward PC stabilization longer-term, and the recently announced sale of McAfee. Following the meetings and the coincident iPhone 7 launch where we believe Intel modem potential share has likely expanded from 30% toward 40-50%, our thesis remains unchanged and we raise estimates consistent with Intel's positive Q3/16 pre-announcement last Friday citing better PC market trends and inventory re-stocking. While pre-announced results were much better than original guidance, we believe investors will still be anxious to confirm re-accelerating growth in DCG with the first full quarter of 14nm Broadwell server CPUs and first material sales of 2nd-generation Xeon Phi, Silicon Photonics and OmniPath fabric products that should combine to push DCG growth back toward the midteens target and to double-digits for the full year. We increase our estimates and price target to $44 from $40 following our meetings and Intel's pre-announced Q3/16 results and believe an attractive dividend yield and valuation make Intel a compelling core stock holding in our view. We reiterate our BUY rating."

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 $37.16 yesterday.

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