Ahead of the Bell: Intel upgraded at Baird

AP News
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Posted: Jan 04, 2010 8:17 AM

Intel Corp. is poised to gain from a recovery in corporate demand for personal computers, a Robert W. Baird analyst said Monday, upgrading the chip maker's stock.

Shares of Intel, the world's biggest provider of the chips that run PCs, rose 39 cents, or 1.9 percent, to $20.79 in premarket trading.

The rosy outlook for Intel, a technology industry bellwether, helped push up other stocks in the sector. Network gear maker Tellabs Inc. rose 22 cents, or 3.9 percent, to $5.90. Motorola Inc., the cell phone maker, was up 14 cents, or 1.8 percent, to $7.90, and data storage provider EMC Corp. rose 33 cents, or 1.9 percent, to $17.80.

In a note to investors, Baird analyst Tristan Gerra raised his rating on Intel shares to "Outperform" from "Neutral" and hiked his price target to $26 from $24.

He said checks with top PC makers suggest they have raised forecasts for the number of chips they plan to buy in the first half of the year, in part because of an expected "rebound in corporate PC spending for 2010."

Gerra said the uptick is partly because of companies upgrading to Microsoft Corp.'s latest operating system, Windows 7.

He estimates revenue at Intel, which is based in Santa Clara, Calif., will rise 15 percent this year from 2009.

Given improving demand, Gerra said Intel shares look cheap. Gerra forecasts 2010 earnings of $1.60, compared with an average prediction of $1.49 from analysts surveyed by Thomson Reuters.