Another Cautious Outlook For Intel (INTC)

Another report is calling for a weaker-than-expected seasonal build on Intel Corporation (NASDAQ: INTC) after channel checks.  Canaccord Genuity is maintaining a HOLD rating with a $24.00 price target objective.

The firm noted that channel checks are indicating sub-seasonal first quarter notebook production.  Factors driving this are hard disk drive shortages (from Thailand flooding), as well as weaker demand and a lack of new models.  The firm now believes that notebook production in the first quarter could be down by 10% to 20% rather than a normal seasonal decline of 5% to 10%.

The outlook is on the heels of a weak November figure and it noted a likely weakness expected for the entire fourth quarter.  The firm noted a healthy Black Friday, but it is cautious about companies with high PC exposure and has observed a building of inventories in microprocessor.  The Windows 8 release is also slated to be after the back-to-school seasonal demand and that may put pressure on Intel’s ultrabook pricing.

Canaccord’s $24.00 price target is not exactly one where the stock sounds expensive… It is 9-times the firm’s 2012 EPS estimate of $2.70 EPS and only 2.2-times expected revenues.