The Sell Rating of Goldman Sachs Belong to Intel Corp. (NASDAQ:INTC)

James Covello, a Goldman Sachs’ analyst while keeping in mind the delaying essentials and costly valuation has increased the target price of Intel Corporation (NASDAQ:INTC) from $22 to $23. The company also confirmed its Sell rating on the stock.

Covello expressed his optimism while talking to the management of Intel Corp. (NASDAQ:INTC) at the CES. He said that he is confident about the company’s recent offerings. However, on one hand Covello felt that the company’s fresh and innovative applications and other materials have a lot of potential, while on the other hand he had some hesitations regarding their effect on the company’s overall expediency.

Covello pointed out the case of Internet of things which gives 4% to sales while 3% goes to Earnings before interest and taxes.

The PC industry: Covello is of the opinion that Intel Corporation’s (NASDAQ:INTC) future revenues will get affected by the challenges that the company will face in the PC industry. Due to the uncertainty in the company’s future revenues as well as its capital expenditures, he gave Intel (NASDAQ:INTC) a Sell rating on the stock.

According to the analyst report released by Covello, Intel (NASDAQ:INTC) despite increasing capex 2011-2015E, just saw 2% increase in its revenue, a -2% in its earnings per share and 0% increase in its CAGRs. The company’s growth chart indicates that there is no guarantee as to what it will offer to its peers and the company’s performance at the stock in 2015 is expected to remain low.

Intel Corp. (NASDAQ:INTC) just recently released its 4^th quarter revenues for the fiscal year 2014 in which it declared positive earnings. The company reported $14.7 billion in revenue revealing a 6% year-over-year increase with a 65.4% gross margin.

Despite the positive earnings, the experts continue to believe that the company’s PC market will face a decline in the future, however, Intel Corp. (NASDAQ:INTC) does not agree with this belief. The total revenue that the company collected in the year 2014 was a result of the $55.8 billion which was generated through the PC business, and $49 billion was generated through the server business. The number clearly shows that a large portion of the overall revenue was generated through the PC business which is expected to collapse in 2015.

The revenue generated thought the PC business makes some people believe that with the release of the new Windows 10 the PC sales will start to recover.

Intel (NASDAQ:INTC) while trying to reconstruct its PC business, lost its position in the mobile processing market. In a report which was released last year by Strategic Analysts, it was revealed that 66% of the mobile market is dominated by QUALCOMM (NASDAQ:QCOM), while Intel (NASDAQ:INTC) only holds 8% share in the mobile market.

In order to get back in line with its competitors the company has now announced a merger between its cellular and PC businesses. As per Bloomberg, 22 analysts suggested a Buy rating for Intel (NASDAQ:INTC), 22 suggested a Hold rating while 8 suggested a Sell rating on the stock. The expected yearly target price is $37.36.