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Intel Has 10% Upside Following Q2 Earnings, According To Brean

Intel Has 10% Upside Following Q2 Earnings, According To Brean - Intel Corporation NASDAQ:INTC

Intel Corporation INTC reported mixed June quarter results, while guiding to the September quarter above seasonal trends.

Brean Capital’s Mike Burton maintained a Buy rating on the company, while raising the price target from $36 to $38.

June Quarter

Burton mentioned that Intel reported its revenues for the June quarter slightly below the consensus, although the EPS beat the consensus expectations by $0.06.

“While the Jun-16 quarter again left us waiting for revenue upside from the company’s Data Center business (DCG), we still believe INTC is well positioned for the 2H of 2016 from both a revenue point of view,” the analyst stated.

Burton believes the company has opex levers that can be realized when its restructuring efforts come into play.

Total revenue declined 2 percent quarter-on-quarter during the June quarter, driven by continued weakness in Intel’s CCG business.

The non-GAAP gross margin stood at 61.8 percent, slightly above the guidance, due to lower platform costs per unit.

September Quarter

Intel raised its revenue guidance for the September quarter to a 10 percent quarter-on-quarter increase, which Burton noted that was better than the normal seasonal patterns and above consensus.

“In terms of full year guidance, the company did not change its view that revenue will grow at a mid-single digit Y/Y clip over 2015,” the analyst pointed out.

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DateFirmActionFromTo
Jul 2016Credit SuisseMaintainsOutperform
Jul 2016Brean CapitalMaintainsBuy
Jul 2016Morgan StanleyMaintainsUnderweight

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