Summit Research Upgrades Intel (INTC) to Buy
Summit Research upgraded Intel (NASDAQ: INTC) from Hold to Buy with a price target of $40.00.
Analyst Srini Sundararajan commented, "We are upgrading Intel to BUY from HOLD and move our price target to $40. Guidance was easily achieved in C3Q15 despite a fall in number of units due to customer preference for latest and greatest. Additionally, emerging economies were really not buying due to the strong dollar and macroeconomic concerns, though we are seeing some signs of stabilization. Future is systems with Skylake, DDR4 and Windows 10 which are doing extremely well and allowing ASP appreciation even with a tepid backdrop. Contra-revenue is no longer a contra-indicator to stay away and is within control. On smartphone, Intel has gotten religion and is trying to be all things to all people. It has defined the battle as being fought on the modem with Qualcomm. And if Samsung and TSMC pull back on capex (likely not the case), Intel's 10nm (equivalent to TSMC and Samsung's 14nm) stands a good chance of getting the foundry biz from Apple. For all these reasons, we upgrade Intel to a BUY based on 16X our FY16 EPS estimate of $2.50. Intel said that there will be GM pressure in CQ4 due to higher expenses associated with starting up 14nm in Ireland, which should be fixed going forward, another tailwind."
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Shares of Intel closed at $32.04 yesterday.