Bottom Line. INTC reported March quarter in-line with guidance, but better
than feared, and guided June quarter essentially in-line with Street
consensus, but again better than the reduction we and most of our peers
forecasted. While structural questions were NOT answered last night, we
would argue that INTC’s business model continues to be SIGNIFICANTLY
more resilient than feared. Specifically: (1) in a cyclically depressed GM and
seasonally weak revenue quarter with weaker-than-seasonal PC demand,
INTC still managed to generate $4.3bn in CFO – annualized at $17.2bn –
more than enough for CapEx + dividend assuming no improvements, (2)
management continued to exercise operational flexibility by reducing CapEx
by $1bn and (3) our analysis suggest that even in an environment where
PCs decline 5% per year between 2012-2016, INTC can still grow EPS from
$2.13 to $2.20 plus and generate $22bn in CFO and $9.5bn plus in FCF.
While this perhaps does not make INTC a great long, our scenario analysis
suggests the implosion in earnings power the Bears covet is also a low
probability event. At 11.0x CY13 EPS, a 4.1% dividend yield, a downside
scenario which is significantly better than feared and an all-time high short
interest of 8.3% (as % of float) – we view shares extremely attractive
especially as growth opportunities mount as INTC continues to stretch out its
manufacturing lead relative to our “Last-Man-Standing-On-Moore’s-Law-
Thesis.” Our 12-18 months TP is $28, or 13.3x (ex-cash) CY13 EPS.
I can't decide which is more pathetic. The fact that you go back and forth between your Paul.Otelini alias and your bacbacker alias OR the fact that you are still posting at all after your Paul.Otelini alias said Intel would hit 3.00 EPS per share this year. Come on, man.