Shares of Intel (INTC) are down 37 cents, or 1.5%, at $23.63 as analysts continue to debate the implications of the company’s cut in its Q4 outlook yesterday morning, which Intel attributed to disruptions of the disk drive supply chain as a result of floods in Thailand.
There was already a healthy debate on the matter yesterday, as I related, with one downgrade of the stock, from Needham & Co.’s Quinn Bolton.
This morning, Canaccord Genuity’s Bobby Burleson, who has a Hold rating on the shares and a $24 price target, writes this morning that there are other issues beyond simply hard drives crimping PC shipments.
“While we acknowledge supply disruption to be severe and likely to worsen in Q1,” he writes, “we see additional negative issues with demand softening for motherboard makers and ODMs while component inventories build downstream.”
On the other hand, Kaufman Brothers’s Mike Burton reiterates a Buy rating this morning, in light of “the stock’s reasonable valuation and high dividend yield.”
“In addition, it is our belief that the HDD situation is short term in nature, and already well understood, hence we recommend that investors with a long-term investment horizon should buy INTC shares on any incremental weakness.”
Craig Ellis with Caris & Co., who also has a Buy rating on the shares, writes today that there’s still lots that’s positive to look forward to for Intel, with 22-nanometer chips coming in 2012 and the “Ultrabook” laptop/tablet product cycle getting underway, as well as “Romley” server chips.
And Ellis believes that supply of PCs, not demand, really is the issue here:
Notably: a) INTC sees 4Q sell-through leading to qq PC unit growth, b) our pre-holiday store checks point to solid PC traffic and demand especially w/Corei3 product, and c) Taiwan sls data QTD through November is supportive of prior INTC guidance. By 3Q12 we think PC Client recovers return near prior levels with Europe the greatest risk. Overall, our PC Client C12 Y/Y growth falls to +4.0% from +7.6%.
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