Why Intel Corporation Might Pop in 2014

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Intel Corporation (NASDAQ: INTC  ) climbed 3% this morning after Citigroup upgraded the chip gorilla from neutral to buy.

So what: Along with the upgrade, analyst Glen Yeung reiterated his price target of $28, representing about 15% worth of upside to yesterday's close. While momentum traders might be turned off by the stock's sluggish 2013, Yeung believes that stabilizing consumer PC and enterprise demand should serve as positive catalysts in 2014.

Now what: For the first time since 2008, Citigroup's model for corporate PC demand is greater than that of consumer demand. And while consumer demand remains particularly sluggish, Yeung believes that Intel's PC shipment guidance for 2014 is sufficiently conservative. When you combine those seemingly reasonable expectations with Intel's still-dominant scale, it's tough to disagree with Citi's upgrade. 

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  • Report this Comment On December 06, 2013, at 10:59 AM, JimBo11 wrote:

    Intel is up about 8-9% ( from around 23.5/share recently, PE ~ 12x) in the last few days due to upgrade by City, Drexel Hamilton and others, which was published by WSJ and Yahoo, but Intel has already said in their investor day, their revenue is not going to increase in 2014 and possibly well into 2015, due to lack of integrated SOC and LTE modem chip, which is less competitive compared to Qualcomm and other low cost chip sets by MediaTek and others. That is: PC chipset is not growing, mobile chipset is not quite ready. Unless you have patience, it is hard to see Intel share price to increase substantially, except for these analysts’ speculations.

  • Report this Comment On December 06, 2013, at 11:24 AM, techy46 wrote:

    Lots of IFs and MAYEs but Intel historically tends to guide very conservative and then beat. JimBo11 is right about Atom SoC with LTE for smart phones being late 2014at best. However, Atom 22nm 3D Bay Trail-T makes my Asus T100 10" 2-in-1 64Gb notebook tablet with Office 2013 and W8.1 perform better than my $1000 Toshiba Satellite notebook. The Asus T100 was $379 at Walmart and lasts 11-12 hrs on battery. I think Intel gets lots of traction with Android and Windows tablets. Asus makes the Nexus 7 and can make really nice Android Intel Inside devices. I see Intel at $28+ by Jan 2015 and in the $30s by Jan 2016. That's 25-30% from here and you get 3.7% to wait.

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