Billwot, I'll import this from the original Intel thread, It starts out about the Kurlak downgrade but contains another opinion near the bottom. Sonki, you've seen this, Ann too. The italicized words are mine:
More about the Kurlak downgrade. There is another opinion,
contrary to his, of course, near the bottom. The words before and
after the bold part are about the same as you've seen, I'm sure,
many more times than most of you wanted to today. In other words,
skip them.
I don't have a URL.
Bloomberg News - August 20, 1998, 10:21 a.m. PT
Intel Declines After Merrill's Kurlak Lowers Rating
Santa Clara, California, Aug. 20 (Bloomberg) -- Intel Corp.
fell as much as 4 percent after influential Merrill Lynch & Co.
analyst Tom Kurlak cut his investment rating on the world's
largest chipmaker, saying its sales growth is certain to slow.
Intel fell 2 11/16 to 86 7/8 in early afternoon trading of
24.3 million, making them the most active in U.S. markets.
Earlier, they tumbled as low as 85 15/16. The shares closed at 91
7/16 on Tuesday, their highest level in almost six months.
Kurlak, one of the most closely watched Intel analysts, told
investors that the company will have trouble achieving high
revenue growth in coming years because microprocessor prices
are
falling as lower-priced personal computers become popular.
''With its average selling price falling, and with total PC
unit growth maturing to a lower rate, it will be hard for Intel
to maintain its current level of PC processor revenues in the
years ahead,'' Kurlak wrote in a report today.
In an interview, Kurlak said he expects sales growth to slow
to about 9 percent annually from 30 percent in the past.
Looking to Servers
To be sure, Intel will be successful in its bid to make
chips for more powerful computers such as servers that run
networks of PCs, which command higher prices, Kurlak said. Even
so, that may not be enough to offset the slump in prices on PC
chips, which are Intel's bread and butter.
''Even a big success (in servers) may not restore Intel's
ASP (average selling price) or its previously above-average
growth,'' Kurlak wrote in his report to investors today.
The Merrill analyst lowered his rating on the shares to long-
term ''neutral'' from long-term ''accumulate.''
Kurlak's views on Intel carry a lot of weight with investors
because the 19-year Merrill veteran has been right about the
company's fortunes at critical times.
Kurlak turned bearish on chip makers on Aug. 22, 1997,
citing an oversupply of semiconductors that would drive chip
prices lower. The Philadelphia Semiconductor Index peaked a
year
ago today and is down 38 percent in the past 12 months.
In March, Kurlak said chip companies were poised for a
''reality check,'' because of weak demand. The very next day,
Intel warned that first-quarter earnings would fall short of
forecasts because of reduced orders from PC makers.
Last month, Intel said second-quarter profit fell a greater-
than-expected 29 percent as sales faltered. The company said it
expected some improvement in the third quarter.
Second-quarter profit fell to $1.17 billion, or 66 cents a
diluted share, from $1.65 billion, or 92 cents, a year earlier.
Analysts were expecting a profit of 68 cents. Sales at the Santa
Clara, California firm fell to $5.93 billion from $5.96 billion.
Intel Debate
Kurlak is at odds with other Intel analysts, many of whom
believe Intel can keep up the high revenue growth that investors
have grown accustomed to by developing new products. PC
sales,
they say, are also rebounding, helping Intel's main business.
''I completely disagree'' with Kurlak, said Dan Niles, an
analyst at BancAmerica Robertson Stephens & Co. in San
Francsico.''I wish I could upgrade the stock,'' said Niles, who
already rates it ''strong buy,'' his firm's highest rating.
Niles said his meetings with PC company executives lead him
to believe that demand for the machines is picking up and that
some prices are rising. He said he expects the second half of
this year to be strong for Intel and 1999 to be better than that.
The debate about Intel's fate has been raging for months
among analysts, in part because Intel faces strong competition in
the microprocessor market for the first time in years.
Rival Advanced Micro Devices Inc. has been successful in
selling its new K6 processor to Compaq Computer Corp. and
others
for use in less expensive computers. Intel responded with its own
low-end chip, called Celeron. Analysts like Kurlak are concerned
that the cheaper chips will hurt sales growth and profits.
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