Lehman reiterates overweight on Intel (INTC ), and raised the $30 target to $35.
Analyst Daniel Niles says third-quarter revenue and gross margin came in at the high end of guidance, and drove earnings per share. He upped the 25 cents fourth-quarter earnings per share estimate to 28 cents, and upped the $1.05 2004 estimate to $1.15. He thinks the 90nm/300mm capacity is ramping well in the fourth quarter.
Niles says capital expenditures should be flattish next year, helping to cut processor unit costs. He thinks Intel is seeing modest signs of growth in U.S. corporate spending, and strength in Japan (both corporate and consumer), as well as in Western Europe. He says demand from other regions is what he still thinks will drive growth for Intel and the information-technology industry over the next couple of years. Niles notes the chipmaker's balance sheet metrics remain strong.