Analysts Adjust Estimates/Targets Following Intel's (INTC) Strong Q4 Report

Shares of Intel Inc. (Nasdaq: INTC) opened up roughly 1 percent Friday morning after reporting fourth-quarter earnings Thursday afternoon.

The company posted quarterly EPS of $0.64, $0.03 better than the analyst estimate of $0.61. Revenue for the quarter came in at $13.98 billion versus the consensus estimate of $13.72 billion.

Analysts Comments and Thoughts:

Following the release two financial firms, Wells Fargo and Deutsche Bank, continued to have positive thoughts on the company and shares.

• Wells Fargo increased its price valuation range on shares from $28-$34 to $30-$36. An analyst at the firm commented, “Intel has a dominant position in a market that we view as attractive (microprocessors for PCs). We think that Intel has a strong lineup of products that will help it gain microprocessor market share. Intel also has a history of strong roadmap execution, enabling the company to maintain a leadership position in microprocessor technology.”
  
  Wells Fargo reaffirmed an Outperform rating and FY12 and FY13 EPS estimates of $2.53 and $2.98, respectively.
  
  
• Deutsche Bank also raised its price target, from $27 to $30 to go inline with its new fiscal 2012 sales and earnings estimates. For FY12, the firm increased its EPS and sales estimates from $2.25 and $53.8 billion to $2.45 and $57.2 billion, respectively. Deutsche now forecasts gross margin will be 63.8 percent for FY12, up from its previous estimate of 61.4 percent.
  
  An analyst at Deutsche said, “For the second consecutive year, Intel guided for much better than expected growth while simultaneously making unmatched investments to further extend its manufacturing and R&D capabilities. For 2012, we expect INTC to “play offense” with new product cycles and new form factors driving solid growth. As the co delivers growth in these areas and returns significant cash to shareholders, we expect both EPS ests and valuation to expand.” Deutsche Bank reiterated its Buy rating on the company.
  
  
• Wedbush lifted its price target slightly from $25 to $26, but maintained on the sidelines with its Neutral rating. As a result of management’s new FY12 guidance, the firm increased its FY12 EPS and sales estimates from $2.25 and $53.55 billion to $2.36 and $56.33 billion, respectively.
  
  An analyst at Wedbush stated, “We continue to think shares are fairly valued here likely trading in a tight range until there is better visibility on Ultrabook adoption rates and Intel’s ability to gain traction in the mobile market.”
  
  
• Goldman Sachs reaffirmed a Sell rating and $22 price target as the firm remains cautious on Semi Equipment and forecasts second-quarter orders will be down significantly. The firm’s analysts see little read-through from the company’s PC client group sales as growth was largely impacted by inventories, ASPs, and geographic mix.
  
  An analyst at Goldman said, “We maintain our Sell rating, as we believe that 2012 Street EPS estimates for Intel will likely remain flat at best this year even assuming the muchbetter- than-seasonal 2H12 sales growth that is implied in Intel’s full-year outlook. This is in contrast to nearly all other semi stocks where Street EPS estimates are bottoming and are likely to be revised higher in coming quarters. While we continue to believe valuation on semis broadly is ahead of fundamentals, we expect other semi stocks to outperform on a relative basis as investors are likely to prefer stocks where estimates are at trough levels and Street estimates will generally be moving up during the year, in particular if 2H12 demand is as robust as Intel believes.”

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