ABM Amro Cuts Intel Rating

Analyst Paul Leming thinks the chipmaker will miss estimates, and he says growth expectations for the industry are too high

ABM Amro downgraded Intel Corp. (INTC ) to reduce from hold.

Analyst Paul Leming says he thinks the company will either noticeably miss its Q2 consensus estimate or make the quarter only by borrowing so heavily from Q3 that Q3 EPS will be very disappointing. He cut the $0.56 2001 EPS estimate to $0.42, and cut the $1.00 2002 EPS estimate to $0.60.

Leming still thinks growth expectations for the semiconductor industry, Intel specifically, are too high. He adds that the premium multiple, which many tech companies continue to enjoy, is unwarranted based on realistic growth expectations. He says the company is fairly valued in the high teens.

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