NEW YORK (TheStreet) -- Intel (INTC) was rising 0.72% to $25.72 on Monday afternoon after Goldman Sachs said it expects the semiconductor maker's fourth-quarter results to be greater than the midpoint of guidance.
Goldman met with Intel President Renee James at last week's Consumer Electronics Show and said Monday that it anticipates the company's fourth-quarter results to come in greater than the midpoint of guidance, but also noted that gross margin is likely to decline in the first quarter of the fiscal year.
Goldman laid out its reasoning for the analysis with the following four points:
"1. We believe the new management team is more open to differing perspectives and is more attuned to market dynamics.
2. We believe Intel's goal is to use mobile unit volume to fill its fabs, which would raise utilization rates and drive higher GM.
3. Intel believes it can succeed in mobile by providing the lowest power processor, but we continue to believe its core advantage is in segments that require high processing power.
4. We believe Intel should pursue its open foundry strategy over its mobile strategy, given its edge in manufacturing."
Intel hit an intraday high Monday of $25.99; its one-year high is $26.04.
TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:
"We rate INTEL CORP (INTC) a BUY. This is driven by some important positives, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- INTC's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Although INTC's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. To add to this, INTC has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for INTEL CORP is currently very high, coming in at 76.84%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.87% is above that of the industry average.
- Net operating cash flow has increased to $5,731.00 million or 11.34% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.34%.
- You can view the full analysis from the report here: INTC Ratings Report