Cowen and Company affirms Intel (Nasdaq: INTC) at Market Perform with an price target of $33 following recent PC shipment numbers.

Analyst Tim Arcuri commented, CQ2:15 PC shipments fell 5% Q/Q and 10% Y/Y to 68.4M, 400bps below seasonal (CQ1 was 300bps below seasonal) and the worst H/H (-14% 1H:15/2H:14) in the last 10 years. A normal seasonal 2H now implies CY PC ships -9% Y/Y. These numbers imply ~$350 million/$0.03 headwind to INTC's CQ2 and CQ3 remains too high, although PC and DRAM data pts should start to stabilize in next 6-8wks.

Implications for Intel: We think that CQ2 preliminary PC results suggest Intel’s PC client revenue could fall $300 - $400 million below our current CQ2:15 estimate (+1% Q/Q, or ~200bps below 3- year seasonal), which could impact CQ2 EPS negatively by ~$0.03. Our analysis is based on the historical correlation between both ODM PC shipment data and Gartner PC shipments. Over the last 12-years, INTC’s PC MPUs have had a correlation of 81% with Taiwan ODM unit growth (tracking up 2% Q/Q in CQ2:15 vs. 5-year seasonal of +5% Q/Q) and a 76% correlation between global PC unit shipments (Q/Q).

Arcuri said he prefers Micron (Nasdaq: MU) over Intel at this point.

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