Lower Expectations for Intel’s Mobile Chipset Biz
Intel’s (NASDAQ:INTC) mobile chipset business may trend lower than expected, leading to a slight downside of around 2% for the Trefis price estimate for Intel’s stock. This downside is based on forecasts created by Trefis members for two key drivers of Intel’s stock over the last week: (1) Mobile Chipsets Revenue and (2) Mobile Chipsets EBITDA Margin.
Intel manufactures chipsets used in notebook PCs, wireless connectivity products, ultra-mobile PC’s and mobile Internet devices (MID). Its major competitors in this space include AMD (NYSE:AMD) and nVIDIA (NASDAQ:NVDA). We currently have a Trefis price estimate of $25 for Intel’s stock, about 25% above the current market price of $20.
Intel’s stock is quite sensitive to (1) Mobile Chipsets Revenue and (2) Mobile Chipsets EBITDA Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
The average of Trefis member forecasts for Mobile Chipsets Revenue indicate an increase from $4.3 billion in 2010 to $5.4 billion by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from $4.4 billion in 2010 to $5.7 billion by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for Intel’s stock. In the past, Mobile Chipsets Revenue has increased from $1 billion in 2003 to $4 billion in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Intel’s stock to Mobile Chipsets Revenue.
Our complete analysis for Mobile Chipsets Revenue is here.
2. Mobile Chipsets EBITDA Margin
The average of Trefis member forecasts for Mobile Chipsets EBITDA Margin indicate an increase from around 39% in 2010 to 48.5% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around 40% in 2010 to around 50% by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for Intel’s stock. In the past, Mobile Chipsets EBITDA Margin has decreased from close to 42% in 2003 to around 38% in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Intel’s stock to Mobile Chipsets EBITDA Margin.