Kurlak defiant <ggg> From Street.com:
The Ax: Notebook: Edelstone Goes for the Knockout
By Eric Moskowitz
Staff Reporter
11/10/98 6:41 PM ET
Looks like we have a winner.
Mark Edelstone of Morgan Stanley Dean Witter is the undisputed ax on Intel (INTC:Nasdaq). So say Intel's stockholders, who are pleased to see the stock approaching the $100 price target the analyst set way back in April, when the Santa Clara, Calif.-based chip maker was struggling to stay above 70.
Edelstone, who wasn't immediately available for comment, raised his stock price target Tuesday yet again from 110 to 120. "We believe PC demand remains seasonally strong, and inventory levels throughout the supply chain appear to be low and under tight control," wrote Edelstone.
As if on cue, the same day Edelstone pounded the table, the world's largest chip maker forecast fourth-quarter sales will rise as much as 10% from third-quarter levels. The company made a practically identical forecast ahead of its third-quarter earnings release last month.
Naturally, the new ax has a strong buy on Intel: "We believe Intel's fourth quarter has continued to benefit from solid PC demand and low inventory levels." (Morgan Stanley has participated in an underwriting of Intel put options in the last three years.)
Edelstone, who also made an astute call on Intel's third quarter, now sees continued improvement in Intel's gross margins. He also believes the company's analyst meeting this Friday is another opportunity for Intel to "highlight its competitive strengths." Since Oct. 8, Intel has shot up 24%. It closed Tuesday up 1 9/16 to 97 9/16.
If Edelstone's the new champ, what about Tom Kurlak, the longtime semiconductor ax with Merrill Lynch? Licking his wounds, Kurlak is not playing good sport.
Instead of giving credit to Edelstone, Kurlak remains adamant that the semiconductor industry will not resume growing again until well through next year. In a phone interview, he further points out that Intel was trading in the 90-to-100 range in 1997, so the stock is still in that trading range. "Intel is only now approaching the level it was at last summer," says Kurlak, who has a neutral on the stock. "Semiconductor stocks in general are in an overpriced trading range." (Merrill Lynch has not participated in any Intel underwriting projects.)
The day's biggest loser, however, is BT. Alex Brown's Erika Klauer, who raised Intel to a strong buy Tuesday from a market perform. Klauer, a former Salomon Brothers analyst, had downgraded Intel from buy to market perform June 1, when the stock was trading at 68. Talk about being late to the game. |
