Market Update: Intel Corporation (NASDAQ:INTC) – Mellanox: Fear Not Intel’s ‘Omni-Path,’ Says Credit Suisse

[at Barrons.com] – Shares of server interconnect chip vendor Mellanox Technologies (MLNX) are up $1.39, or 3.6%, at $40.06, after Credit Suisse’s John Pitzer raised his rating this morning on the stock to Outperform from Neutral, with a $50 price target, writing that investors should not be overly concerned with competition from Intel (INTC), and that there are “multiple drivers of upside” for Mellanox. Regarding Intel, he sees the company’s competing product offering, “Omni-Path,” being somewhat more limited than Mellanox’s chips: While INTC is clearly intent on brining a competitive product in 2016, we would highlight the flowing offsets – (1) Checks suggest INTC’s Omni-Path is a more proprietary/closed architecture which is somewhat troublesome to customers and targets HPC (less than 50% of MLNX Rev), (2) we believe overall market growth is accelerating and supportive of multiple players, and (3) INTC is as likely to accelerate overall market adoption as it is to take share. Read more on this. Intel Corporation (INTC) , currently valued at $151.29B, started the session at $31.76. Looking at today’s trading action, the company’s one day range from $31.68 to $32.22 with a one year range of $24.87 to $37.49. INTC shares are currently priced at 14.13x this year’s forecasted earnings, which makes them relatively expensive compared to the industry’s 10.22x forward p/e ratio. And for dividend hunters, the company pays shareholders $0.96 per share annually in dividends, yielding 3.05%. Consensus earnings for the current quarter by the 39 sell-side analysts covering the stock is an estimate of $0.63 per share, which would be $0.11 worse than the year-ago quarter and a $0.03 sequential increase. Investors should also note that the full-year EPS estimate of $2.23 is a $0.08 worse when compared to the previous year’s annual results. The quarterly earnings estimate is based on a consensus revenue forecast of the current quarter of $14.80 Billion. If realized, that would be a 0.54% increase over the year-ago quarter. More recently, JMP Securities upgraded INTC from Mkt Perform to Mkt Outperform (Nov 20, 2015). Previously, JMP Securities upgraded INTC from Mkt Underperform to Mkt Perform. With the above information in mind, readers should note that the average price target is $36.22, which is 14.04% above where the stock opened this morning. See more in (NASDAQ:INTC) Similar Articles: Market Update: Intel Corporation (NASDAQ:INTC) – The 2016 Bullish and Bearish Case for Intel Market Update: Intel Corporation (NASDAQ:INTC) – Intel (INTC) Stock Up on Regulatory Approval of $16.7 Billion Altera Deal Market Update: Intel Corporation (NASDAQ:INTC) – Don’t Get Tricked by Intel Corporation’s Financial Sleight of Hand