'Read-Through' From Intel (INTC) Q1 Results
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Up: 17 | Down: 9 | New: 23
Rating Summary:
12 Buy, 23 Hold, 6 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 17 | Down: 9 | New: 23
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Yesterday Intel Corporation (Nasdaq: INTC) reported Q1 results. Wells Fargo analyst Maynard Um's PC 'read-through' doesn't suggest a near-term boon for the industry.
"We have long argued that PC pricing needs to come down to more attractive levels to entice upgrades--with pricing in the back half expected to reach those levels, there could be some unit demand elasticity though we worry that PC OEMs will see smaller margins due to flat/rising component pricing, mix shift to lower end, and/or heightened competition," said Um.
For hard disk drive vendors, Um said "the mix shift to lower end PCs could also drive lower ASP as PC OEMs could opt for lower capacity drives to save on bill of materials."
UM maintained a Market Weight rating on the PC industry and Market Perform ratings on DELL (Nasdaq: DELL), Hewlett-Packard Company (NYSE: HPQ), Seagate Technology (Nasdaq: STX) and Western Digital Corporation (Nasdaq: WDC).
For the Data Center Group (DCG) Intel's report leads to the conclusion that enterprise servers are still soft, but there is likely strong growth in cloud.
"However, since the majority of Intel's server strength is from the cloud environment, and not the enterprise segment, DELL and HPQ may not necessarily benefit commensurately as some cloud companies whitebox their server," said Um.
For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $21.03 yesterday.
"We have long argued that PC pricing needs to come down to more attractive levels to entice upgrades--with pricing in the back half expected to reach those levels, there could be some unit demand elasticity though we worry that PC OEMs will see smaller margins due to flat/rising component pricing, mix shift to lower end, and/or heightened competition," said Um.
For hard disk drive vendors, Um said "the mix shift to lower end PCs could also drive lower ASP as PC OEMs could opt for lower capacity drives to save on bill of materials."
UM maintained a Market Weight rating on the PC industry and Market Perform ratings on DELL (Nasdaq: DELL), Hewlett-Packard Company (NYSE: HPQ), Seagate Technology (Nasdaq: STX) and Western Digital Corporation (Nasdaq: WDC).
For the Data Center Group (DCG) Intel's report leads to the conclusion that enterprise servers are still soft, but there is likely strong growth in cloud.
"However, since the majority of Intel's server strength is from the cloud environment, and not the enterprise segment, DELL and HPQ may not necessarily benefit commensurately as some cloud companies whitebox their server," said Um.
For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.
Shares of Hewlett-Packard closed at $21.03 yesterday.
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