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Merrill, UBS Like Intel Ahead of Quarter Update
By TSC Staff
12/02/2003 09:33 AM EST
In what is becoming a quarterly ritual, Wall Street research houses began laying out strategies Tuesday for how to game the upcoming midquarter update being held by Intel (INTC:Nasdaq - commentary - research).
In a bullish call, UBS opined that the microprocessor giant will likely raise the midpoint of its fourth-quarter revenue guidance when it meets with analysts on Thursday. The brokerage sees the estimate moving up to about $8.6 billion, toward the high end of its existing range of $8.1 billion to $8.7 billion.
UBS cited strong "Taiwan motherboard data" for October, solid results from Dell (DELL:Nasdaq - commentary - research) and Hewlett-Packard (HPQ:NYSE - commentary - research), and its own channel checks.
The brokerage set a new price target of $44, reflecting a valuation of 29 times its new 2005 per-share earnings estimate of $1.51. Intel's shares recently cost $34.37 on Instinet, up 33 cents, or 1%, from their Monday close.
Merrill Lynch was similarly optimistic, raising its fourth-quarter revenue estimate to $8.78 billion from $8.4 billion and upping the earnings call to 31 cents a share from 28 cents a share. The brokerage cited channel checks that suggested its own estimates of microprocessor strength was too conservative.
Merrill maintained a buy recommendation and a $40 price target, the latter of which reflects a calculus involving peak earnings and return on operating capital.
Both brokerages noted that they are either in or expect to be in the market for investment banking business with Intel. |
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