Intel May See Above-Consensus Sales Growth In 2006
David Ng, 12.08.05, 10:24 AM ET
Banc of America Securities reiterated a "buy" rating and $33 target price on Intel (nasdaq: INTC - news - people ), citing the likelihood of gross-margin expansion and above-consensus sales growth in 2006.
"We view the near-term supply constraints as a positive for Intel," Banc of America analyst Eric A. Ghernati wrote in a recent report. "The lack of availability may temper the ability to build excess channel inventory in the strong seasonal period."
"In the event that holiday sell-through is decent, we would not be surprised to see better-than-seasonal results from Intel in the first half of 2006, as inventory replenishment occurs throughout the channel."
For the fourth quarter, Banc of America expects Intel to narrow the range of its sales guidance around the prior midpoint of $10.5 billion, with a slight potential bias to the upside
The research firm also expects Intel to narrow the range of its gross-margin outlook to around 63%, with potential for mild upside.
"We think Intel's ability to deliver material upside at its mid-quarter update is somewhat limited," Banc of America said.
The research firm's top sector picks are Intel and Texas Instruments (nyse: TXN - news - people ), which is rated at "buy" with a $36 target price. Its least-favorite picks are Mentor Graphics (nasdaq: MENT - news - people ) and Lattice Semiconductor (nasdaq: LSCC - news - people ), both rated at "sell" with respective targets of $8 and $4. |
