J.P. Morgan upgraded


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to neutral from underweight, saying it should benefit disproportionately from strong demand for laptop personal computers.

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The shares were recently up 9 cents, or 0.3%, to $27.54 on the Instinet premarket.

J.P. Morgan noted its PC analyst was raising his estimate of 2003 growth to 11% from 10% after visiting various computer companies in Asia. He expects laptop sales to rise 22% this year.

"We believe Intel benefits from this continued shift more than any other semiconductor company due to its increased content and higher gross margins on laptop chips," the brokerage wrote. It raised its 2003 revenue estimate for Intel to $29.4 billion from $29.2 billion.

"Despite its extreme valuation, given the strong order trends at PC component companies, the continued shift to laptops, and the prospects of continued strength into the fourth quarter, we believe Intel's stock should continue to trade well in the near term," J.P. Morgan wrote. "Although we are adopting a more positive view on the stock, our long-term valuation concerns remain intact."

Intel's stock trades at about 28 times J.P. Morgan's calendar-year 2004 earnings estimate of $1 a share and at the high end of its historical range of 10 to 30 times earnings. It's trading at 4.6 times the brokerage's calendar-year 2003 sales estimate.