Nomura Securities Romit Shah reiterates ratings but raises earnings estimates
Good news: raises estimates for current quarter to 50 cents from 47 cents (above consensus of 39 cents)
Good news: raises estimates for 2013 year to $1.84 from $1.75. (slightly below consensus of $1.87)
I am surprised that he did not raise estimates higher so the probability of an INTC "miss" would be higher. Expect Romit to say he is disappointed with Q2 results and "DOWNGRADE" INTC to $1.75 for 2013 after earnings.
Nomura Equity Research’s Romit Shah weighed in on the prospects for Intel (INTC), whose shares he rates “Reduce,” with an $18 price target. Shah raised his estimates for the current quarter to 50 cents from 47 cents previously, and raised his year outlook to $1.84 from $1.75, based on an expectation of a reversal of prior quarters’ inventory reserves:
"We expect gross margin to improve from 58.0% in Q2 to 61.5% in Q3 and 63.0% in Q4. One of the biggest drivers is the reversal of inventory reserves […] Between 4Q12 and 2Q13E, we estimate that Intel will record inventory reserves of 300bps (Figures 1 and 2). Those charges should largely reverse over the next two periods. In other words, Intel should benefit from the sale of previously written-off inventory to the tune of 150bps per quarter. In addition, Intel should recoup 450bps in startup costs over 2H13."
Shah thinks Intel may forecast Q3 revenue of $13.5 billion, below consensus of $13.7 billion, given he thinks “uptake of Haswell has been lower than the company’s expectations.”
dumbo is digging in. He can't believe he is wrong. He raised his estimate because he now realized they are too low but continues to say one day it will be bad. Personally I believe they will do $2.00 this year and 2.50 next year. Even the bear says they do 1.90. So I say with a 15x PE then that gets us the 30 that I am projecting. You would have to give them a single digit multiple to earnings at 1.90 to get the 18.
Well many are conceding, ok this quarter is fine but look out for next quarter that is when things really get bad. LOL, these bears need to give it up. INTC will never see the 18 price that Romit is forecasting.