INTC To Report In Line Quarter Says Piper Jaffray

Piper Jaffray is maintaining its Neutral rating and its price target of $22.50 on Intel INTC as the company prepares to release its Q2 report. According to Piper Jaffray, “We expect Intel to report in line with our estimates and consensus. However, after two quarters of inventory build-up downstream, we expect estimates to come down going forward. Intel has been insistent that PC unit growth will be 15%. We expect PC unit growth to decline to 9% this year and decline to 5% next year. Our view is based on two factors. First, innovation has moved on to tablets and smartphones, marking the end of the PC era. Second, Windows 7 was launched in October 2009 and the PC upgrade cycle will likely slow after a strong CY10 and CY11. Moreover, given Intel's large capex budget this year, we expect a muted bounce in gross margin associated with low process start-up costs that occur in even years.” INTC closed at $22.28 yesterday.