FYI: Here's Briefing.Com comments re INTC this a.m.;
INTEL CORP (INTC) 158 1/2 +2 5/8. Shares of leading chipmaker are getting a boost this morning as the Nasdaq recovers yesterday's losses and the chip sector puts in a strong early performance. Also contributing to INTC's price appreciation is a very bullish Merrill Lynch report that forecasts excellent earnings growth and impressive intermediate- and long-term price appreciation. The report is tied to the "successful" launch of the company's Pentium II processor. According to the firm, Intel launched the product with 100 OEM customers already in place, a level that took 9 months to reach from the launch date of the Pentium. The firm expects the early exuberance surrounding the new product to lead to a surge in demand, which will in turn create a vastly more profitable product mix. These views are reflected in Merrill's 1997 and 1998 estimates of $9.45 and $11.20 a share. Although the firm's fiscal 1998 forecast is 8% above the current First Call estimate of $10.36 a share, Merrill believes the EPS figure could be conservative based on the strong early take off of the Pentium II. Merrill puts shipments of the Pentium II and Pro at 16.5 million units this year, compared to 3.7 million Pros last year, while the firm also sees an 18% increase Intel's average selling price (ASP). Merrill Lynch also takes a shot at Advanced Micro Devices (AMD 43 3/8 -1/4), saying that the rapid takeoff of the Pentium II processor should allay fears about AMD's K-6 processor, which the firm says has yet to obtain top name OEMs. Summed up, Merrill rates this issue a "buy," near- and long-term. The firm has a 1997 target price of $200 and a 1998 price objective of $235, which suggests upside of 26% and 48%. |
