For Intel, Altera could be an opportunity to diversify its revenue stream and decrease its reliance on PC sales
Posted By: Aman JainPosted date: April 01, 2015 08:36:48 AMIn: StocksNo Comments
Intel Corporation (NASDAQ:INTC) was assigned a Buy rating by Deutsche Bank AG (NYSE:DB) (ETR:DBK) (FRA:DB) in a research report issued on Tuesday. The analysts have a price target of $38 on the chip maker.
Intel-Altera deal unlikely?
Commenting on the Intel-Altera deal in an earlier report on Friday, analyst Ross Seymore of Deutsche Bank said the deal will not come across any regulatory hurdles and is relevant from the strategic point of view. Seymore added that Altera is in need of cutting-edge technologies, and Intel is a dominant force in 14nm chips. However, Seymore noted, “given Intel’s $20 billion share repurchase plan that was announced last year, the likelihood of a deal of this scale is unlikely.”
Several other analysts have also released their verdicts on Intel in recent weeks. MKM Partners upgraded Intel to Buy and assigned a price target of $40 in a research note to investors on Tuesday. Bank of America has assigned it a price target of $38 and rated the stock as a Buy in a research note to investors on Tuesday. B. Riley maintained a Buy rating on the chip maker and assigned it a price target of $41 in a research note to investors on March 20. Finally, analysts at Credit Suisse Group AG (ADR) (NYSE:CS) gave a price target of $40 and assigned a Buy rating to the stock. Presently, Intel has an average rating of Hold and an average price target of $35.58.
Why would Intel buy Altera?
Intel has its own reasons to go for a deal with Altera, with analysts estimating that Altera would add 4% of revenue to the top line growth of the company. For Intel, over 60% of sales revenue come from its PC unit, and the chip maker wants to break from the tradition of a
The financial stocks have an attractive valuation but will likely struggle to move higher until the Federal Reserve hikes interest rates, Pete Najarian added. He also likes health care stocks and Intel (INTC).
Jim Lebenthal, president of Lebenthal Asset Management, agreed, saying he likes large-cap pharmaceutical stocks, old tech stocks like IBM (IBM), Intel and Cisco Systems (CSCO), as well as bank stocks. If the rate hike is delayed a few more months, it won't make much of a difference over the long term
The consensus is .44
Intel (NASDAQ:INTC) was upgraded by Deutsche Bank to a “buy” rating in a research note issued on Tuesday. The firm currently has a $38.00 price target on the stock. Deutsche Bank’s target price points to a potential upside of 20.79% from the company’s current price.
Intel (NASDAQ:INTC) traded up 0.16% during mid-day trading on Tuesday, hitting $31.51. The stock had a trading volume of 16,855,816 shares. Intel has a 52-week low of $25.62 and a 52-week high of $37.90. The stock has a 50-day moving average of $32. and a 200-day moving average of $34.. The company has a market cap of $149.23 billion and a P/E ratio of 13.64.
By MKM Partners ($42.32, March 30, 2015)
We are downgrading field-programmable gate array vendor Xilinx to Neutral from Buy but our estimates and $45 fair-value estimate remain unchanged.
Xilinx (ticker: XLNX ) shares rallied in sympathy the last hour of Friday trading following reports of Intel ( INTC ) (rated at Buy, $40 price target) being in talks to acquire competitor Altera ( ALTR ). We see little strategic fit for a second field-programmable gate array (FPGA) acquisition and, if true, an Intel for Altera deal creates a stronger competitor. Furthermore, we see the FPGA model of specialized processing becoming less favored by hardware-commoditization trends. Our fair-value estimate of $45 is 20 times the September 2015-June 2016 GAAP earnings-per-share estimate of $2.23.
We see little strategic fit for a second FPGA acquisition. Intel is alone in building a leading-edge foundry business with interest in securing volumes and manufacturing intellectual property (IP). Broadcom ( BRCM ) has similar networking exposure and is the only larger fabless supplier, but its investment model is to deliberately trail by at least one process node.
A potential Intel-Altera combination would create a powerful FPGA competitor with captive foundry access and greater reach in data centers and networking. We see the potential for great cross-sell opportunities in the data center with Intel server chips and Altera hardware accelerators to assist functions like machine learning. This would also be a negative for Nvidia ( NVDA ) (rated at Neutral, $24 fair-value estimate) graphic processing units (GPUs) used as accelerators. Its inability to replicate the “analog utility” model limits Xilinx’s leverage and is less attractive to suitors.
Although Xilinx continues to deliver leading products and win designs at top original equipment manufacturers (OEMs), the conversion to high-volume production has been disappointing. One underlying issue
Intel logoIntel (NASDAQ:INTC) has been given an “AA” credit rating by Morningstar. The research firm’s “AA” rating suggests that the company is a very-low default risk. They also gave their stock a three star rating.
A number of other firms have also recently commented on INTC. Analysts at B. Riley reiterated a “buy” rating and set a $41.00 price target on shares of Intel in a research note on Friday, March 20th. Analysts at Credit Suisse Group AG set a $40.00 price target on shares of Intel and gave the company a “buy” rating in a research note on Friday, March 13th. Analysts at Ascendiant Capital Markets upgraded shares of Intel to a “sell” rating and set a $24.00 price target on the stock in a research note on Friday, March 13th. Finally, analysts at Pacific Crest lowered their price target on shares of Intel from $42.00 to $35.00 and set an “outperform” rating on the stock in a research note on Friday, March 13th. Six analysts have rated the stock with a sell rating, seventeen have given a hold rating, nineteen have issued a buy rating and one has issued a strong buy rating to the company’s stock. The company presently has an average rating of “Hold” and an average target price of $35.72.
"And those claiming that Intel has announced something need to put up or shut up." Nobody needs do anything for you.
lol What is your problem? Complaining about whether or not there is an announcement is kind if childish. You won't change the interest. INTEL or Altera is under no obligation to announce they are considering a merger. If you are short maybe you should consider covering or add to the short if it rises without an official announcement.
Why Merrill Lynch Is Positive On Intel Corporation (INTC) Acquisition Of Altera Corporation
Analysts at Merrill Lynch has reaffirmed a Buy rating for Intel with the target price of $38 after it announced its intention of acquiring Altera
By: Martin Blanc
Published: Mar 30, 2015 at 3:54 pm EST
Analysts at Merrill Lynch have reaffirmed a Buy rating for Intel Corporation (NASDAQ:INTC) with a price target of $38 after the world's largest chip maker announced its intention to acquire the smaller semiconductor firm Altera Corporation (NASDAQ:ALTR).
The Merrill Lynch analysts suggest, the acquisition will be a step forward for Intel as it looks to diversify its operation manufacturing PC chips and into much broader market sectors including autos, defense and telecoms. Buying Altera will help Intel to enhance its servers as the company can get full access to Altera’s FPGA chips.
Analysts have pointed out other semiconductor companies that can profit from acquisition deals; including Broadcom Communication (NASDAQ:BRCM), Xilinx, Inc. (NASDAQ:XLNX) and NXPI Semiconductors NV (NASDAQ:NXPI) which acquired Freescale Semiconductor Ltd (NYSE:FSL) to became the number one company in auto industry.
Analysts say buying up Altera will lead to a paltry 1%-2% increase in Intel’s annual revenues. The flipside is that they predict an increase of over 5 % or 15 cents in Intel’s EPS for FY16 which paints a positive picture for investors. It’s believed that Intel will have to raise between $6 billion to $13 billion to acquire its semiconductor target; not a problem for Intel given its size. However, this can affect the company’s ability to buy back its shares for some time.
The acquisition will not result in any competitive advantage for Intel as Altera can add only $2 billion in sales whereas Intel has already made a sale worth $1.5 billion in the telecom wireless sector.
M&A Speculation Fuels Bullish Betting on Intel Corporation (INTC)
Intel Corporation (INTC) calls are trading at an accelerated clip today
by Karee Venema 3/30/2015 1:45 PM
Intel Corporation (NASDAQ:INTC) shot higher on Friday afternoon, amid reports the chipmaker has its sights set on Altera Corporation (NASDAQ:ALTR) -- the latter of which got handed a plate full of bearish backlash this morning. Today, INTC has pared a portion of these gains -- down 0.9% at $31.72 -- but options traders think another end-of-week surge is on the horizon.
However, there is now an Acer Chromebook aimed at the professional consumer and business market. It’s a full-sized laptop with a 15.6-inch display, the newest Broadwell CPU from Intel Corporation (NASDAQ:INTC), Gigabit Wi-Fi, all-day battery life and a starting price under $250.
yes already spewing about how the rise in price makes no sense.
"Even if the talks go through, it still needs the regulators to approve." BFD Nothing to stop it.
Intel in Talks to Buy Altera -- 4th Update
7:26 pm ET March 27, 2015 (Dow Jones) Print
By Dana Mattioli and Dana Cimilluca in New York and Don Clark in San Francisco
Intel Corp. is in advanced talks to buy chip partner Altera Corp., according to people familiar with the matter, a move that would represent the semiconductor giant's biggest-ever acquisition.
It wasn't immediately clear how much Intel would pay for a deal. Altera had a market capitalization of about $10.4 billion before The Wall Street Journal first reported on the talks and ended Friday valued at $13.4 billion. It would be a big bite for Intel, which has historically stuck to smaller-size acquisitions.
The Santa Clara, Calif., company is a giant in the semiconductor business and had a market value of $151.6 billion. It is the largest maker by far of chips that supply calculating engines in PCs and server systems.
Altera, based in San Jose, Calif., is one of the two largest makers of field-programmable gate arrays, or FPGAs, which can be configured by customers for various tasks after they are manufactured. FPGAs are widely used in phone networks, computer-networking equipment, cars and other products.
Altera and longtime rival Xilinx Inc. have pushed FPGAs into new areas where customers once designed chips from scratch. These chips can be programmed to carry out specialized tasks like data encryption and work much faster than standard microprocessors like Intel's Xeon.
Intel and Altera have worked together in the past. Intel, which has tried to build a new business out of manufacturing chips for other companies, in 2013 reached an agreement to offer its most advanced production process to Altera.
Buying Altera would further solidify their manufacturing partnership, and help Intel keep its factories full. Still, a tie-up with Altera may not help Intel place more of its chips in smartphones, now a major gap in its portfolio as more computing activities take place in pocket-size product
didn't you get a premium for the sale of the options? I assume you sold Calls. You wanted somebody to buy them and lose the premium they paid. It is a zero sum game.