Too Much Excitement Over Intel

Shares in Intel (INTC) have not been much above their current price of since February 2004. Analsysts are taking a new liking to the shares. As Barron’s points out, Credit Suisse and Citi both made bullish comments on the shares. The Credit Suisse analysts even tagged the company with at $35 price target. Intel has not seen that price since 2002. Given the relative rise in the Nasdaq (stock price inflation, if you will) that would be much more like the shares hitting $45.

To put that in perspective, INTC operating income in 2000 was $10.4 billion. In 2003, the number slipped to $7.5 billion, but that was still above the current trailing twelve months operating income figure of $5.9 billion.

It would appear that Intel has a ways to go to be worth $35 in today’s market.

Douglas A. McIntrye