While analysts covering Microsoft (MSFT) largely came out today in defense of the stock on the heels of worse-than-expected PC data yesterday from Gartner and IDC, by contrast the numbers seem to have emboldened the bears on Intel�(INTC) stock.
Yesterday’s data showed showed a 0.1% year-over-year decline in unit shipments in the June-ending quarter, worse than some expectations for a modest rise.
Today, several reports seem to be suggesting that means at best an in-line report from Intel when it discusses Q2 results next Tuesday, July 17th.
Mike Burton of Northland Securities reiterates a Market Perform rating on Intel shares and a $27 price target, and cut his estimates for Q2 and Q3.
Burton thinks there’s a possibility the results could come in lower than the consensus $13.56 billion in revenue and 52 cents, but then again, the recent warning from Advanced Micro Devices (AMD) suggests that Intel could still at least meet Street revenue estimates.
Raymond James’s Hans Mosesmann reiterates a Market Perform rating, writing that Intel’s close correlation with the PC market, in his view, means the company will likely deliver toward the lower end of its forecast range of $13.1 billion to $14.1 billion:
Intel�s PC MPU units actually have a 0.89 r-squared with IDC�s estimate for PC units. This leads us to believe our 2Q12 unit forecast for a modest y/y decline looks reasonable, which equates to roughly flat growth sequentially.
He’s officially projecting $13.45 billion.
And Romit Shah of Nomura Equity Research, who has a “Reduce” rating on Intel shares and a $25 price target, thinks that price chopping abounded during the quarter, to the detriment of both chip makers:
We see evidence that ASPs are softening. Our research indicates that aggressive pricing on Core i3 Ivy Bridge parts contributed to AMD�s miss on Monday. We also believe earlier in the quarter that there were price cuts to support lower price points for Ultrabooks.
Shah cut his estimate for Q3′s results to $14.3 billion and 61 cents from a prior $14.5 billion and 63 cents. The Street is at $14.64 billion and 65 cents.
Sterne Agee‘sVijay Rakeshreiterated a Neutral rating on Intel shares and a $26 price target, writing that “the overall macro slowdown should not be a surprise ahead of multiple OEM-ODM platform (Ultrabook, Win8, Touch) transitions and could drive a more muted 2H12.”
It’s not clear if server processor sales will make up for a shortfall in PC processors, writes Rakesh: “Intel’s topline obviously includes Server shipments, but while Romley is ramping, we believe overall Server trends are more flattish near-term with macro.”
Williams Financial Co.‘s Cody Acree this Intel will have to take down its year numbers:
These numbers continue to fuel our concern regarding Intel and our belief that the company will need to negatively revise its full year targets and likely provide very conservative September quarter guidance, which will likely pressure the company�s shares.
He also thinks the results are actual a positive for AMD:
We are glad to see that these numbers are consistent with what AMD just said in their negative preannouncement earlier this week. AMD cited considerable surprise weakness in Asia and Europe and lackluster demand in the U.S., as expected. We do expect the PC market should modestly improve through the second half, which should benefit AMD, as we believe the company is gaining
material design win market share.
Intel shares today closed down 65 cents, or 2.6%, at $24.74.
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