Intel Corporation (INTC) — Shares jumped earlier this month after the company said it expects revenues to increase next year and raised its annual dividend 8 cents to $1.04 per share for 2016.
S&P Capital IQ Equity Research, which has a “buy” rating on INTC stock, expects sales to decline 1.3% this year but increase 4.5% next year. Its analysts note an improving market for microprocessors and semiconductor products. And they believe higher cloud investments, server growth, wearables and the “Internet of Things” should help Intel maintain its huge market share and drive revenues higher.
Capital IQ forecasts further mobile cost reductions and sees EBITDA margins increasing in 2016. Its $39 price target is 16.6 times its 2016 EPS estimate of $2.37.
On Oct. 7, INTC stock broke through its bearish resistance line and 200-day moving average at about $31.50. Two weeks later, it jumped above $35 before succumbing to profit-taking that took it down to its 200-day moving average.
INTC stock established a near-term bullish trendline drawn from its Aug. 24 low through the successful test of the 200-day moving average. And it flashed a golden cross, a long-term buy signal, when it smashed through the moving average and bearish resistance line. Higher-than-average volume accompanied the breakout and MACD issued a buy signal.
Try to buy INTC stock at $33 for a trade to $37 and a potential return of 12%. Long-term buyers may want to purchase shares at the market price as a cornerstone investment in the semiconductor sector for capital gains and its 3% dividend yield.
