UBS Raises Price Target on Intel (INTC) to $43 Ahead of 3Q Report

UBS reiterated a Buy rating on Intel (NASDAQ: INTC), and raised the price target to $43.00 (from $40.00), ahead of the company's 3Q earnings report. UBS believes that the company's stock will continue its positive momentum if Intel executes well in 3Q16 and reports y/y data center sales growth of 15%. Intel's new 3Q16 sales guidance is $15.6B versus its prior guidance of $14.9B.

Analyst Stephen Chin commented, "We keep a Buy rating as better PC sales remain a key driver for the stock as we estimate PCs are still 53% of Intel's total sales. Intel reported its total 3Q16 sales would be higher than its original guidance by $700M, or 5%. We estimate Intel's 3Q16 PC sales will be up 12% q/q. One outstanding question is whether this was a 1-time benefit or the result of better consumer interest in new products/replacement of older PCs. If PC ODM sales are not up as strong, this may have been a 1-time benefit. Intel's prior PC shipment guidance for full year 2016 was down high single digits % y/y. The company did not provide an update today, but our global team estimates 2016 PC units will be down -9% y/y with 2017 down -2% and 2018 up +1%. We estimate Intel can still grow its EPS by 10% as long as it generates relatively flat PC sales and executes well in its data center, FPGA, memory and IOT business segments."

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 $37.67 yesterday.

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