UBS Slaps a Buy on Intel

Headcount reductions and improving microprocessor unit sales should help Intel(INTC Quote) raise margins over the next two years, UBS argued in upgrading the shares to buy from hold Monday.

UBS also raised its Intel price target to $23 from $21, reflecting a higher 2007 earnings estimate of $1.28 a share and a higher estimate of Intel's price-to-earnings multiple.

The upgrade is "based on our expectations for positive trends for gross margin and operating margin that is supported by a more positive view of Intel's competitiveness both in the near term and longer term," UBS said. "Our higher 2007 EPS estimates and P/E multiple reflect our expectations for improved longer-term gross margins and more near-term operating-expense leverage." ...