Tuesday January 11, 8:29 am Eastern Time
RESEARCH ALERT - CSFB upgrades Intel to strong
buy
NEW YORK, Jan 11 (Reuters) - Intel Corp. (NasdaqNM:INTC - news) is poised to
benefit from a major computer upgrade in 2000 and an expected surge in sales could lead
shares of the world's largest chip maker to double in the next 12 months, Credit Suisse First
Boston said in a research note on Tuesday.
-- In a research note, analyst Charlie Glavin upgraded his share recommendation on Intel to strong buy from buy ahead of the
company's scheduled fourth quarter earnings report on Thursday.
-- Shares of Intel jumped 2-3/4 to 88-1/2 in pre-open trading Tuesday from Monday's closing price of 85-3/4 on the Nasdaq
stock market.
-- ''2000 looms as the beginning of a major upgrade cycle for Intel,'' Glavin wrote, referring to the expected introduction of
Microsoft Corp.'s (NasdaqNM:MSFT - news) Windows 2000 software system in February, which is expected to fuel a wave
of new PC sales.
-- He noted that during the last two major Microsoft upgrades to Windows 3.1 and Windows 95 in the early and mid-1990s,
Intel stock increased 130 percent to 150 percent over a 12 month timeframe.
-- ''Intel should report 4Q99 (fourth quarter) in-line with consensus,'' Glavin wrote. ''While Intel still has some execution risks,
we believe that the 2000 guidance ... will draw investors back in the stock,'' he said.
-- The First Call/Thomson Financial consensus estimate for the fourth quarter of 1999 is for Intel to report earnings of 63 cents,
up slightly from the 60 reported in the fourth quarter of 1998. Year 2000 earnings are predicted to accelerate to $2.67 per
share from an estimated $2.26 per share for full year 1999.
-- ''An ugly 1999 is over,'' Glavin declared.
-- He said Intel's ''barbell strategy'' should kick in during 2000, with the growth in low-cost, sub-$1000 PCs during 1999
fueling a two- to three-year surge in the number of more costly server computers used to manage these lower cost machines.
-- The analyst said other catalysts in the coming year include the takeoff in production of advanced chips using Intel's latest
0.18-micron manufacturing process and the introduction and volume shipment of its 600 megahertz chip for mobile computers
on January 18.
-- He also pointed to the expected introduction of Intel's next-generation 64-bit processor code-named Itanium in the third
quarter.
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