Weekly Semiconductor And Tech Update: INTC, BRCM, FFIV, MU, TXN

-3.69%
Downside
42.71
Market
41.13
Trefis
INTC: Intel logo
INTC
Intel

Semiconductor stocks have been one of the top performing sectors in 2014, significantly outperforming the S&P 500 index. However, the technology stocks in the Standard & Poor’s (S&P) 500 Index saw their biggest plunge since April on Thursday, September 25. The S&P index fell below its average price for the past 50 days for the first time since August. U.S. stocks witnessed the sharpest decline in the last eight weeks (on Thursday) as Apple’s stock declined by 2.9% on account of issues related to its new smartphone and mounting concern that Russia may seize foreign assets. [1]

Below is a weekly update for some other technology companies that Trefis covers.

See Our Complete Analysis for These Companies Here

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Intel

Leading PC chipmaker, Intel (NASDAQ:INTC) got approval from Israel’s Finance and Economy Ministries to invest $6 billion in the remodeling and continued growth of its chip manufacturing plant in Kiryat Gat. (Read: Intel Invests $6 Billion In Israel To Create Advanced Chip Manufacturing Facility) The company also announced signing a series of agreement with Tsinghua Unigroup to expand the product offerings and adoption for Intel-based mobile devices in China and worldwide. (Read: Intel’s Collaboration With Tsinghua To Expand Its Footprint In The Chinese Mobile Chip Market)

Intel’s stock price traded between the $34 – $35 range. Our valuation of $33 (market cap of $162 billion) for the company is only marginally lower than the current market price (market cap of $172 billion). We expect Intel to report revenue of around $53 billion and net income of $10 billion for 2014. We forecast non-GAAP diluted EPS of $2.18, which is in line with the market consensus of $2.17 (Reuters).

Broadcom

Global leader for semiconductor solutions for wired and wireless communications, Broadcom (NASDAQ:BRCM) enabled the industry’s first 20 nm 100G coherent digital signal processor (DSP) – NTT Electronics’ new NLD0640. The company also announced the immediate availability of a new line of switches optimized for cloud-scale data centers. (Read Press Releases)

Broadcom’s stock traded between $40 – $41 last week. Our valuation of $38.50 for Broadcom is now at a marginal discount to the market price. The company has a market cap of nearly $25 billion. Our 2014 revenue and net income estimates for the company stand at $8.7 billion and 720 million respectively. Our non-GAAP diluted EPS forecast is $2.98, as compared to the market consensus of $2.55.

F5 Networks

Last week, F5 Networks (NASDAQ:FFIV) announced that one of Belgium’s largest telecom providers – BASE Company – has selected its Traffix Signaling Delivery Controller to meet subscribers’ increasing demand for data by helping to serve its customers with high data transfer speeds, as well as enabling fast rollout of new services. F5’s stock declined marginally last week (~ 4%). Our price estimate of $118 for F5 Networks is now inline with the current market price, which translates into market cap of approximately $9 billion. We expect the company to witness double digit growth in its revenue for calendar 2014. Our non-GAAP diluted EPS estimate for fiscal year 2014 (ending September) stands at $5.12, as compared to the market consensus of $5.33.

Micron

Micron Technology (NASDAQ:MU) announced its Q4 2014 and fiscal 2014 results on September 25, posting better-than-expected results ahead of its own guidance. (Read: Micron Closes Its Fiscal 2014 On A Strong Note Driven By Healthy Memory Market Conditions) Our $30 valuation for Micron is marginally lower than the current market price. The company has a market cap of nearly $35 billion. For calendar year 2014, we forecast revenue, net income and diluted non-GAAP net income of approximately $17 billion, $2.2 billion and $3.04, respectively. We are in the process of updating our model for the fiscal 2014 earnings release.

Texas Instruments

Texas Instruments (NASDAQ:TXN) introduced its first transimpedance amplifier (TIA) for the 100G optical networking market. (Read Press Release) TI’s stock traded between $48 – $49 last week. Our valuation of $42 (~ $45 billion market cap) for TI is at a more than 10% discount to the current market price. We expect the company to report $13.1 billion and $2.6 billion in revenue this year. Our GAAP diluted EPS forecast for TI stands at $2.43 while the market consensus is at $2.41.

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Notes:
  1. US markets fall most in eight weeks as Apple tumbles, ETTelecom.com, September 26, 2014 []