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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (173131)	2/20/2003 9:39:25 AM
From: Robert Douglas	Respond to of 186894

From Joe • We are upgrading our rating on Intel from Sell to Neutral in conjunction with our sector upgrade report released earlier today. Historically low PC inventory levels in the supply chain and more reasonable valuation levels support our change in stance. • Inventory levels in the PC supply chain are 41 days ending Q402, down from 45 days ending Q302 and materially below the 7-year industry average of 56 days. With inventories lean, we believe any upside in end demand should translate directly into stronger shipments at PC semiconductor companies, of which Intel is the largest. • While Q103 is expected to be back-end loaded, our checks suggest Intel should be able to meet our conservative $6.818 billion revenue (down 5% Q/Q) and $0.13 EPS estimates for the quarter. We note that the company’s mid-quarter update is scheduled for Thursday, March 6 th . • Intel has dipped 8% since November. Even taking the recent rally into account, and business is no longer deteriorating. We believe Intel is now reasonably valued at 25x our CY03 EPS estimate of $0.67 and 19x our CY04 EPS estimate of $0.87. At $16.78, Intel is also trading close enough to our long-term theoretical fair value of $14.43 to merit a Neutral rating.