Analyst Tim Luke says Intel's update was disappointing with weaker end demand and an inventory workdown leading to sales guidance moving to even below the lower end of Intel's guidance range and below the lower end of modest whispered expectations. He notes management now suggests that with softer end demand, inventories on hand may actually rise by $100 million to $150 million, vs. flat prior expectations, prompting them to confirm that wafer starts should now be slowed going forward.
Luke cut the $1.16 2004 EPS estimate to $1.12 and cut the $8.8 million revenue estimate to $8.45 million. He cut the target to $23. He thinks it may take some time for investor sentiment to brighten.