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Intel Corporation Message Board

  • tomb_warrior tomb_warrior May 11, 2010 11:11 PM Flag

    CS Takeaways from Analyst Day

    Analyst Day Takeaways

    ■ Bullish Tone at Analyst Day. At its investor day at its Santa Clara, CA HQ today Intel articulated a 10%+ revenue/EPS growth strategy centered around core PC (consumer, notebooks, servers) and new products (embedded, smartphones, CE) while also raising its normal gross margin range to 55-65% (from 50-60%). We remain structurally bullish on global PC penetration growth supportive of 20%+ long-term PC unit growth, servers, enterprise client refresh, and a credible smartphone strategy driving $2+ earnings power.
    ■ Product Cycles Driving 10%+ LT Growth; 2Q Trending In-Line. INTC noted that consumer notebooks (PCs moving from /household to /person), servers (TAM expansion into Unix, storage, embedded), tablets and smartphones were likely to drive 10%+ revenue and EPS growth over the next 5 years. Current 2011 CS/Street estimates of +5% growth in 2011 are probably too low, and higher growth could result in 20-25 cents upside to current CS/Street EPS est. of
    $2.10/$1.97. Consistent with our thoughts on noise around April month Taiwan data points, INTC re-iterated that 2Q was trending to guidance (-5% to +3% q/q); CS/Street are at the mid-pt or down 1% q/q.
    ■ Gross Margin Targets Raised. INTC raised its normal GM range to 55%-65% in 2010-13 from lower weighted average die-sizes (integrated MPU+graphics, Atom for low-end), cost appropriate products by segment (vs. prior waterfall), better inventory management (hubbing, 5-6 wk cycle times), and a strong
    product line-up. Two headwinds to 1H11 GMs – 22nm start-up costs (300bps) and 32nm Sandybridge ramp (100bps).
    ■ 45nm SoCs Now; 32nm in 2011. Intel highlighted that its first 45nm SoC, Moorestown, with graphics and video cores in-addition to the Atom/x86 core, had power consumption in-line with today’s tablets and hi-end smartphones. Intel deferred discussion on customer products till Computex (1-4 June). INTC’s expected introduction of power/leakage optimized 32nm SoC mfg process with
    Medfield (2H11) should result in entry into mainstream smartphones.
    ■ Reiterate OP. Our $32 PT represents a 16.5x P/E multiple to our $1.93 EPS 2010 EPS est. vs. 5 year NTM average of 17.6x. Given the upward bias to topline growth this cycle, our $2+ earnings call could begin to look more like $2.50+.

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