Lower PC Demand Is 'Bad For Intel,' Says Citi

Citi lowered its estimates on Intel Corporation (NASDAQ: INTC) and cut its price target from $35 to $34. The firm reiterated a Neutral rating on the stock.

Analyst Christopher Danely observed a continued decline in PC demand that could result in shipments coming in below Intel guidance and consensus estimates.

Citi IT Hardware Analyst Jim Suva recently lowered the 2015 PC shipment growth estimate from flat year-over-year to down 2 percent. Furthermore, Danely’s analysis indicated that a 1 percent change in PC demand resulted in 3 percent change in Intel’s EPS.

Due to the expectation for lower PC demand, Danely reduced the 2015 revenue estimate from $57.3 billion to $56.9 billion and the EPS estimate from $2.27 to $2.20. Citi’s new EPS estimate was 7 percent below the consensus of $2.38.

The analysts had previously expected flat PC shipments in 2015 due to emerging market demand. “However, the latest datapoints indicate emerging market PC demand remains soft,” said Danely, which is “bad for Intel.”

Intel recently traded at $33.54, down 1.19 percent.