NEW YORK (TheStreet) -- Intel (INTC) - Get Intel Corporation (INTC) Report stock is decreasing by 0.31% to $27.64 in early morning trading on Friday, after it was initiated with a "sector perform" rating and a $29 price target at RBC Capital Markets.
The company was rated on a neutral basis due to an expected decline in PC demand, despite Intel anticipating a seasonal rise, RBC said in an analysts note.
Intel's exposure to the PC market is still around 60%, but may continue to decline as analysts estimate a 3% to 5% drop in sales over the next few years.
The company still has a cost optimizing potential and a strong growth prospective in other segments, analysts noted.
The data center group and Internet of things segments are expected to have up to a 15% growth rate.
The firm also estimates Intel will have earnings of $2.11 on revenue of $54.3 billion for 2015, a decrease from 2014.
Separately, TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTEL CORP (INTC) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- INTC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTEL CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for INTEL CORP is currently very high, coming in at 78.60%. Regardless of INTC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 20.50% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.5%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full analysis from the report here: INTC Ratings Report