Markets & Finance

Lehman Upgrades Intel to 'Overweight'

Lehman Brothers raised Intel (INTC) shares to overweight from equal-weight. The firm also upgraded Advanced Micro Devices (AMD) to equal-weight from underweight.

Analyst Daniel Niles says the upgrade reflects a more bullish view of the chip industry. He says improving corporate profits should drive increased business investment. He notes of the current PC base in the corporate world, 180 million units are over four years old, pointing to the need for new models, and boosting chip demand.

Niles believes Intel will raise its flat to 6% fourth-quarter revenue growth guidance to 4% to 6%, and will forecast 50-100 basis points growth in gross margins. He says these levels are conservative given strong signs in average selling prices and European operations.

He lifted his $17 price target for Intel shares to $24. He sees fourth-quarter earnings per share of 12 cents.

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