Needham & Co. Reiterates “Buy” Rating on Intel Following NVIDIA Deal (INTC)

Computer processor maker Intel Corporation ( INTC ) on Tuesday saw its “Buy” rating reiterated by analysts at Needham & Co., following the company’s licensing fee agreement with graphics chip maker NVIDIA ( NVDA ). The firm also backed its $26 price target on INTC, which implies a 26% upside to the stock’s Monday closing price of $20.69. A Needham analyst commented, “We believe the $1.5B licensing fee, payable to NVIDIA (Nasdaq: NVDA) in six annual installments, is financially a good price for Intel for such technology and has limited financial impact on INTC’s earnings. We are slightly altering our estimates to reflect the licensing payments, and reiterate our rating…The amortization impacts 2011 GM and EPS by 39bps and $0.02, respectively, bringing our 2011 EPS estimate to $1.88 from $1.90. Our 2012 EPS estimate is revised to $2.12 from $2.15 and our GM assumption falls 49bps to 65.6%.” Intel shares were mostly flat in premarket trading Tuesday. The Bottom Line Shares of Intel Corp ( INTC ) have a 3.48% dividend yield, based on last night’s closing stock price of $20.69. The stock has technical support in the $19 price area. If the shares can firm up, we see overhead resistance around the $22-$23 price levels. Intel Corporation ( INTC ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Needham & Co. Reiterates “Buy” Rating on Intel Following NVIDIA Deal (INTC)

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