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

To: Paul Engel who wrote (62962)	8/21/1998 11:47:00 AM
From: Diamond Jim	Respond to of 186894

RE: "Intel had no direct comment on Mr. Kurlak's conclusions, and declined to provide specifics about the new Celeron chips in advance of the Monday announcement. But a spokesman noted that the company hasn't changed its guidance to analysts about its profitability. " ++ Thanks Paul, get to see that. jim

To: Paul Engel who wrote (62962)	8/21/1998 6:28:00 PM
From: puborectalis	Respond to of 186894

Here's Karnak(ML)...Long term opinion lowered to Neutral based on risk/reward,projected slower growth long term....Low end PC mix continues to grow,shortages of low priced microprocessors and ample supply of high end implies Q3 sales could fall short of expectations....Slower unit growth,failing pricing defeats old growth formula..Forecast 33% ASP decline next 5 years and 5%point lower margin to 45%...Server processors not expected to fully offset falling PC processor prices...9% longer term sales growth rate projected after current negative growth period ends,down from previous 15% estimate and 30% historic rate 1986-96.....Pentium II Fails to drive sales..Why 15 months after intro of PII are sales 8% lower and its net income 40% lower?not be explained on PC slowdown and inventory correction solely....profits falling faster than sales due to sensitivity of margin to pricing...believe Intel is losing more sales to AMD while having ample supply of high end chips...expect Intel to aggressively price Mendicino and .25 PII chips to meet low end demand....ASP will have to decline to hold the tradiotional 80-85% market share.....damaged growth model.." we have presented this exercise in order to help long term investors assess the risk/reward tradeoff that Intel's stock presents today.At 32 times our 1998 earnings estimate,this stock is rich relative to our estimate future earnings growth rate of 7%...REDUCE our long term rating to NEUTRAL(i.e=SELL).