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Intel Pitch
                            October 21, 2012




Michael Karp                                       | TMT Portfolio Manager
Jawwad Siddiqui                                    | Senior Analyst
Anson Kwok                                         | Junior Analyst
This presentation is for informational purposes only, and is not an offer to buy or sell or a
solicitation to buy or sell any securities, investment products or other financial product or
service, an official confirmation of any transaction, or an official statement of Limestone
Capital Investment Club. Any views or opinions presented are solely those of the author
and do not necessarily represent those of Limestone Capital.
1                                                           Company Overview
                                                 Company Description
 Business Model: World’s largest and highest valued multinational semiconductor chipmaker based on revenue and
  shipments. Intel designs and manufactures advanced integrated digital technology platforms. These platforms are sold
  primarily to original equipment manufacturers (OEMs), original design manufacturers (ODMs), and industrial and
  communications equipment manufacturers in the computing and communications industries.
 Revenue Sources: Most of revenues are from PC & data storage sectors but has been looking into future sources of
  revenue, purchasing a variety of software and services while developing new tablet technologies.
 Acquisition of McAfee (gaining McAfee’s DeepSAFE technology platform), Intel’s 2011 revenue for its software and
  services sector shot up 608%.
 Expansion Plans: Intel is also expanding their market share in the smartphone and tablet industries, building multi-year
  partnerships with Motorola and Google, optimizing the Atom chip for Android compatibility.

             Revenue by Segment                                          Revenue Growth by Segment




Overview                Thesis            Macro/Micro         Catalysts/Risk           Valuation
                                                                    s
2                                                               Company Overview
                  Key Financials                                                        Management

               (MM except per share data)         Name                   Position          Background

     Share Price:               $21.45           Paul S. Otellini       CEO               Managed several Intel businesses, including the
                                                                                           company’s PC and server microprocessor
     Market Cap:                107,910                                                   divisions. Past COO, Became CEO 2005.
     EV:                        111,030
     Revenue LTM:               54,530           David Perlmutter       EVP, GM &         Responsible for Intel’s platform solutions for all
                                                                         Chief             computing segments including datacenters,
     Gross Profit Margin:       63.36%                                  Product           desktops, laptops, handhelds, embedded devices,
     Profit Margin:             20.94%                                  Officer           and consumer electronics
     Debt to Equity:            0.1473
                                                  Stacy J. Smith         CFO               Leads the worldwide finance organizations, and
     Dividend Yield:            4.14%                                                     oversees finance, accounting and reporting, has
     Historical Beta:           1.01                                                      previous experience in Finance, Sales and
                                                                                           Marketing, and Information Technology


                                            Intel Annotated Performance YTD
                                                                                                 Q3: Stock price has sustained
                                                                                                 decline due to lowered revenue
                                                                                                 forecast by Intel due to economic
                                                                                                 uncertainty.          Q4 & Onwards: High
                                                                                                                            CAPEX on new
                                                                                                                            products being
                                                                                                                                 released.

                                                                        Aug. 12, 2012:
          FY2011: Beat all-time earning
                                                                        Buffett sells stake in
          records, $12.9 MM net
                                                                        Intel. Share price
          income, $54 MM revenues.
                                                                        dropped negligibly.



    Overview                  Thesis        Macro/Micro              Catalysts/Risk               Valuation
                                                                           s
3                                         Investment Thesis
 Argument 1 : Stability and industry dominance unaffected by macro factors

Macroeconomic uncertainty does not bar rapid growth in global semiconductor
industry. Intel consistently has best gross margins, strong dividend yield, and a
strong balance sheet from extremely low debt.


           Argument 2: New products pave the way for partnerships
Clover Trail opens opportunities for new partnerships with companies such as
Lenovo, HP, Dell, Samsung, Acer, ASUS – leading to increased market share.
Haswell architecture release in 2013 will help to increase efficiency and gross
margins for Intel as it releases future platforms and semiconductors



                            Argument 3: Valuation
Undervalued on a EV/EBITDA, EV/Forward EBITDA, and EV/EBIT basis
compared to peers.

Overview        Thesis     Macro/Micro   Catalysts/Risk   Valuation
                                               s
4                                       Macro & Micro Outlook
                                       Macroeconomic Concerns
•   Despite global macroeconomic uncertainties (Eurozone crisis), global GDP growth, and economic
    slowing in BRIC countries, demand remains strong for semiconductors in applications such as
    smartphones, media tablets, and automotive electronics

•   Short term spending fueled by QE3 in the United States leads to higher sales in luxury goods such
    as electronics. This effects demand for Intel’s products positively.

                                            Industry Outlook:

   Industry Growth: According to IDC (International Data Corporation), semiconductor revenues will
    grow 4.6% in 2012 to $315B. From 2011 through to 2016, revenues are projected to grow at a CAGR
    of 4.8%, reaching $380 billion in 2016.

           Revenues from computing industry segment projected YOY growth of 1.5% for 2012 and CAGR
            of 3.7% for 2011-2016 forecast period
           Semiconductor revenues for mobile PCs projected YOY growth of 5.9% & 2011-2016 CAGR of
            9.6%

   Windows 8: High expectations for the launch of Microsoft's Windows 8 operating system and next-
    generation smartphones later this year, will accelerate semiconductor revenue growth in 2013 and
    beyond
   Supply constraints on semiconductor products are easing as foundries are bringing more capacity
    online

Overview             Thesis        Macro/Micro      Catalysts/Risk       Valuation
                                                          s
5                                                         Catalysts & Risks
                                                    Catalysts
 Clover Trail (new chip):
       Intel’s eventual release of Clover Trail will allow them to retain a higher portion of the tablet market
         share
       Prior to Clover Trail’s release, Intel has already secured deals with Samsung, Dell, Lenovo, HP, Acer,
         ASUS and other firms are already in the process of building Clover Trail tablets.
       Clover Trail is already present in hybrid laptop tablets such as the Dell XPS Duo 12 and Samsung
         Series 5 Slate. Intel says over 20 tablets are in the works right now, which will greatly increase Intel’
         future profits.
 New Architecture for Chip Production: The Haswell release in 2013 could help to greatly increase
  efficiency and gross margins for Intel as it releases future platforms and semiconductors
 High FCF & Revenue Growth: Will allow them to produce architecture effective enough to dominate the
  smartphone and tablet markets
 Acquisitions: Intel’s recent acquisition of McAfee gives them access to a brand new sector of revenue, as
  they can continue to expand their presence in the security software market with various forms of integrated
  platforms
                                                      Risks

     High start-up costs with Haswell Architecture: Initial start up costs with the 14nm ramp, capital
      expenditures costs associated with the Haswell microarchitecture and the release of Clover Trail
     Market Forces: Material slow-down in data centre demand could lead to reduced profits
     Cannibalization: Increasing tablet cannibalization of the PC market, specifically tablets running ARM
      microprocessors and architecture
     ARM: Competing with ARM, who still dominates both the smartphone and tablet market, could lead to
      degrading margins and profits or an inability to effectively enter the market
    Overview            Thesis          Macro/Micro       Catalysts/Risk         Valuation
                                                                s
6                                                                                                            Valuation
                                          Large Cap Semiconductors Comparables Universe
($ in millions, except per share data)
                                                     Current                                                   Enterprise Value /
                                                     Share       Equity     Enterprise     LTM       2013E        LTM     2013E         LTM      2013E
 Company                                 Ticker       Price      Value        Value        Sales     Sales      EBITDA EBITDA           EBIT     EBIT
 Intel Corporation            NASDAQ:INTC            $   21.48 $ 107,466 $ 100,979         1.9x       1.9x       4.2x     4.7x          5.9x     10.4x
 Advanced Micro Devices, Inc. NYSE:AMD               $    2.74 $ 1,939 $ 2,381             0.4x       0.5x       25.1x    6.4x           nmf      nmf
 Micron Technology Inc.       NASDAQ:MU              $    5.67 $ 5,769 $ 7,189             0.9x       0.8x       5.4x     3.2x           nmf      nmf
 NVIDIA Corporation           NASDAQ:NVDA            $   12.63 $ 7,824 $ 4,566             1.1x       1.0x       5.8x     4.3x          8.0x     9.6x
 QUALCOMM Inc.                NASDAQ:QCOM            $   58.89 $ 100,310 $ 88,289          4.8x       4.3x       13.1x    10.4x         15.1x    15.2x
 Texac Instruments Inc.       NASDAQ:TXN             $   27.28 $ 31,038 $ 33,408           2.5x       2.5x       7.9x     8.6x          11.1x    15.3x
 Overall
 Mean                                                                                      1.9x       1.8x       10.3x     6.3x         10.0x    12.6x
 Median                                                                                    1.5x       1.4x        6.9x     5.6x          9.6x    12.8x

 High                                                                                      4.8x       4.3x       25.1x    10.4x         15.1x    15.3x
 Low                                                                                       0.4x       0.5x        4.2x     3.2x          5.9x     9.6x

                                                  Implied Valuation From Comparables
($ in millions, except per share data)
                            Multiple                             Implied EV                          Equity   Value                  Price/Share
                        LOW         HIGH          METRIC       LOW       HIGH       Debt   Cash      LOW       HIGH      S/O      LOW      HIGH
EV/LTM Sales             1.5x       1.9x          58,199    87,299        112,518   5650   7331     88,980    114,199    5019      $ 17.73 $ 22.75
EV/2013E Sales           1.4x       1.8x          62,727    89,699        114,267   5650   7331     91,380    115,948    5019      $ 18.21 $ 23.10
EV/LTM EBITDA            5.5x       6.9x          23,929    132,206       163,911   5650   7331    133,887    165,592    5019      $ 26.67 $ 32.99
EV/2013E EBITDA          5.6x       6.3x          25,814    143,269       161,770   5650   7331    144,950    163,451    5019      $ 28.88 $ 32.56
EV/LTM EBIT              7.7x      10.0x          17,667    136,475       177,109   5650   7331    138,156    178,790    5019      $ 27.52 $ 35.62
EV/2013E EBIT            9.6x      11.2x          19,065    182,074       212,769   5650   7331    183,755    214,450    5019      $ 36.61 $ 42.72


IMPLIED SHARE PRICE                                                                                                                 $           28.78

  Overview                     Thesis               Macro/Micro              Catalysts/Risk                   Valuation
                                                                                   s
7                     Valuation: Discounted Cash Flow
Mid-Year Convention                              Historical Period                                             Projection Period
                                        2009           2010            2011           2012       2013              2014               2015           2016
Sales                                   $35,127.0 $43,623.0            $53,999.0    $57,647.8    $61,659.3         $66,061.4          $70,778.9     $75,834.5
 % growth                                      -     24.2%                23.8%         6.8%         7.0%              7.1%               7.1%          7.1%
COGS                                     15,566.0  15,132.0             20,242.0     23,788.2     25,443.6          27,260.1           29,206.8      31,293.0
Gross Profit                            $19,561.0 $28,491.0            $33,757.0    $33,859.6    $36,215.7         $38,801.3          $41,572.1     $44,541.6
 % margin                                  55.7%        65.3%             62.5%        58.7%        58.7%             58.7%              58.7%         58.7%
R&D                                       5,653.0      6,576.0           8,350.0        313.4        313.6             313.7              313.9         314.0
SG&A                                      7,931.0      6,309.0           7,670.0      9,847.1     10,532.4          11,284.3           12,090.1      12,953.7
EBITDA                                   $5,977.0 $15,606.0            $17,737.0    $23,699.0    $25,369.8         $27,203.3          $29,168.1     $31,273.8
 % margin                                  17.0%     35.8%                32.8%        41.1%        41.1%             41.2%              41.2%         41.2%
Depreciation & Amortization               4,744.0   4,398.0              5,141.0      6,202.6      6,634.2           7,107.8            7,615.4       8,159.3
EBIT                                     $1,233.0 $11,208.0            $12,596.0    $17,496.4    $18,735.6         $20,095.5          $21,552.7     $23,114.5
  % margin                                  3.5%     25.7%                23.3%        30.4%        30.4%             30.4%              30.5%         30.5%
Taxes                                     1,335.0   4,581.0              4,839.0      6,123.8      6,557.5           7,033.4            7,543.5       8,090.1
EBIAT                                     ($102.0)   $6,627.0           $7,757.0    $11,372.7    $12,178.1         $13,062.0          $14,009.3     $15,024.4
Plus: Depreciation & Amortization         4,744.0      4,398.0           5,141.0      6,202.6      6,634.2           7,107.8            7,615.4        8,159.3
Less: Capital Expenditures               (4,515.0)    (5,207.0)        (10,764.0)    (8,241.8)    (8,815.3)         (9,444.7)         (10,119.1)     (10,841.9)
Less: Increase in Net Working Capital       330.0       (501.0)            213.0     (8,474.3)      (553.7)           (607.6)            (651.2)        (697.8)
Unlevered Free Cash Flow                  $457.0     $5,317.0           $2,347.0      $859.1      $9,443.3         $10,117.6          $10,854.4     $11,644.0
 WACC                                      9.62%
 Discount Period                                                                         0.50            1.5               2.5                3.5            4.5
 Discount Factor                                                                         0.96           0.87              0.79               0.73           0.66
  Present Value of Free Cash Flow                                                     $820.6      $8,228.2          $8,042.3           $7,871.0      $7,702.8

                    Enterprise Value                                 Implied Equity Value and Share Price
Cumulative Present Value of FCF                $68,763.7          Enterprise Value                       $157,116.2                        NOTE
                                                                  Less: Total Debt                          7,331.0
                                                                                                                                 Projections for cash flows
Terminal Value                                                    Less: Preferred Securities                     -
                                                                                                                                 have been made for 10
UFCF 2021                                      $16,526.9          Less: Noncontrolling Interest                     -
Perpetuity Growth Rate                             2.00%          Plus: Cash and Cash Equivalents              5,065.0
                                                                                                                                 years, the first five are
                                                                                                                                 shown in the model
  Terminal Value                           $221,310.6
Discount Factor                                  0.40               Implied Equity Value                 $169,512.2              above. WACC is based
 Present Value of Terminal Value               $88,352.4
                                                                                                                                 on comparable
 % of Enterprise Value                            56.2%           Basic Shares Outstanding                     5,003.0           companies used in the
                                                                  Fully Diluted Shares Outstanding             5,019.4           comparables analysis.
                                                                                                                                 The bear case is shown.   8
 Enterprise Value                          $157,116.2               Implied Share Price                        $33.77
8                 Valuation: Recommendations
               Football Field                                         Implied Valuation

                                                           Analysis              Price

                                                           Comparables           $28.78

                                                           DCF                   $33.77


                                                                 Analyst Recommendations

                                                           Analysis               Target Price

                                                           RBC Capital Markets    $24.00

                                                           Wells Fargo            $39.00

                                                           Maxim Group            $29.00

                                                           JPMorgan               $19.00


                      Recommendation, Entry & Exit Strategy

                       Entry Price:         Market Price
                       Target Price:        $30.00
                       Time Horizon:        12 Months
                       Stop Loss            $20.00

Overview   Thesis         Macro/Micro    Catalysts/Risk          Valuation
                                               s

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Intel Corporation (INTC) Stock Pitch

  • 1. Intel Pitch October 21, 2012 Michael Karp | TMT Portfolio Manager Jawwad Siddiqui | Senior Analyst Anson Kwok | Junior Analyst This presentation is for informational purposes only, and is not an offer to buy or sell or a solicitation to buy or sell any securities, investment products or other financial product or service, an official confirmation of any transaction, or an official statement of Limestone Capital Investment Club. Any views or opinions presented are solely those of the author and do not necessarily represent those of Limestone Capital.
  • 2. 1 Company Overview Company Description  Business Model: World’s largest and highest valued multinational semiconductor chipmaker based on revenue and shipments. Intel designs and manufactures advanced integrated digital technology platforms. These platforms are sold primarily to original equipment manufacturers (OEMs), original design manufacturers (ODMs), and industrial and communications equipment manufacturers in the computing and communications industries.  Revenue Sources: Most of revenues are from PC & data storage sectors but has been looking into future sources of revenue, purchasing a variety of software and services while developing new tablet technologies.  Acquisition of McAfee (gaining McAfee’s DeepSAFE technology platform), Intel’s 2011 revenue for its software and services sector shot up 608%.  Expansion Plans: Intel is also expanding their market share in the smartphone and tablet industries, building multi-year partnerships with Motorola and Google, optimizing the Atom chip for Android compatibility. Revenue by Segment Revenue Growth by Segment Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 3. 2 Company Overview Key Financials Management (MM except per share data) Name Position Background  Share Price: $21.45 Paul S. Otellini CEO Managed several Intel businesses, including the company’s PC and server microprocessor  Market Cap: 107,910 divisions. Past COO, Became CEO 2005.  EV: 111,030  Revenue LTM: 54,530 David Perlmutter EVP, GM & Responsible for Intel’s platform solutions for all Chief computing segments including datacenters,  Gross Profit Margin: 63.36% Product desktops, laptops, handhelds, embedded devices,  Profit Margin: 20.94% Officer and consumer electronics  Debt to Equity: 0.1473 Stacy J. Smith CFO Leads the worldwide finance organizations, and  Dividend Yield: 4.14% oversees finance, accounting and reporting, has  Historical Beta: 1.01 previous experience in Finance, Sales and Marketing, and Information Technology Intel Annotated Performance YTD Q3: Stock price has sustained decline due to lowered revenue forecast by Intel due to economic uncertainty. Q4 & Onwards: High CAPEX on new products being released. Aug. 12, 2012: FY2011: Beat all-time earning Buffett sells stake in records, $12.9 MM net Intel. Share price income, $54 MM revenues. dropped negligibly. Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 4. 3 Investment Thesis Argument 1 : Stability and industry dominance unaffected by macro factors Macroeconomic uncertainty does not bar rapid growth in global semiconductor industry. Intel consistently has best gross margins, strong dividend yield, and a strong balance sheet from extremely low debt. Argument 2: New products pave the way for partnerships Clover Trail opens opportunities for new partnerships with companies such as Lenovo, HP, Dell, Samsung, Acer, ASUS – leading to increased market share. Haswell architecture release in 2013 will help to increase efficiency and gross margins for Intel as it releases future platforms and semiconductors Argument 3: Valuation Undervalued on a EV/EBITDA, EV/Forward EBITDA, and EV/EBIT basis compared to peers. Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 5. 4 Macro & Micro Outlook Macroeconomic Concerns • Despite global macroeconomic uncertainties (Eurozone crisis), global GDP growth, and economic slowing in BRIC countries, demand remains strong for semiconductors in applications such as smartphones, media tablets, and automotive electronics • Short term spending fueled by QE3 in the United States leads to higher sales in luxury goods such as electronics. This effects demand for Intel’s products positively. Industry Outlook:  Industry Growth: According to IDC (International Data Corporation), semiconductor revenues will grow 4.6% in 2012 to $315B. From 2011 through to 2016, revenues are projected to grow at a CAGR of 4.8%, reaching $380 billion in 2016.  Revenues from computing industry segment projected YOY growth of 1.5% for 2012 and CAGR of 3.7% for 2011-2016 forecast period  Semiconductor revenues for mobile PCs projected YOY growth of 5.9% & 2011-2016 CAGR of 9.6%  Windows 8: High expectations for the launch of Microsoft's Windows 8 operating system and next- generation smartphones later this year, will accelerate semiconductor revenue growth in 2013 and beyond  Supply constraints on semiconductor products are easing as foundries are bringing more capacity online Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 6. 5 Catalysts & Risks Catalysts  Clover Trail (new chip):  Intel’s eventual release of Clover Trail will allow them to retain a higher portion of the tablet market share  Prior to Clover Trail’s release, Intel has already secured deals with Samsung, Dell, Lenovo, HP, Acer, ASUS and other firms are already in the process of building Clover Trail tablets.  Clover Trail is already present in hybrid laptop tablets such as the Dell XPS Duo 12 and Samsung Series 5 Slate. Intel says over 20 tablets are in the works right now, which will greatly increase Intel’ future profits.  New Architecture for Chip Production: The Haswell release in 2013 could help to greatly increase efficiency and gross margins for Intel as it releases future platforms and semiconductors  High FCF & Revenue Growth: Will allow them to produce architecture effective enough to dominate the smartphone and tablet markets  Acquisitions: Intel’s recent acquisition of McAfee gives them access to a brand new sector of revenue, as they can continue to expand their presence in the security software market with various forms of integrated platforms Risks  High start-up costs with Haswell Architecture: Initial start up costs with the 14nm ramp, capital expenditures costs associated with the Haswell microarchitecture and the release of Clover Trail  Market Forces: Material slow-down in data centre demand could lead to reduced profits  Cannibalization: Increasing tablet cannibalization of the PC market, specifically tablets running ARM microprocessors and architecture  ARM: Competing with ARM, who still dominates both the smartphone and tablet market, could lead to degrading margins and profits or an inability to effectively enter the market Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 7. 6 Valuation Large Cap Semiconductors Comparables Universe ($ in millions, except per share data) Current Enterprise Value / Share Equity Enterprise LTM 2013E LTM 2013E LTM 2013E Company Ticker Price Value Value Sales Sales EBITDA EBITDA EBIT EBIT Intel Corporation NASDAQ:INTC $ 21.48 $ 107,466 $ 100,979 1.9x 1.9x 4.2x 4.7x 5.9x 10.4x Advanced Micro Devices, Inc. NYSE:AMD $ 2.74 $ 1,939 $ 2,381 0.4x 0.5x 25.1x 6.4x nmf nmf Micron Technology Inc. NASDAQ:MU $ 5.67 $ 5,769 $ 7,189 0.9x 0.8x 5.4x 3.2x nmf nmf NVIDIA Corporation NASDAQ:NVDA $ 12.63 $ 7,824 $ 4,566 1.1x 1.0x 5.8x 4.3x 8.0x 9.6x QUALCOMM Inc. NASDAQ:QCOM $ 58.89 $ 100,310 $ 88,289 4.8x 4.3x 13.1x 10.4x 15.1x 15.2x Texac Instruments Inc. NASDAQ:TXN $ 27.28 $ 31,038 $ 33,408 2.5x 2.5x 7.9x 8.6x 11.1x 15.3x Overall Mean 1.9x 1.8x 10.3x 6.3x 10.0x 12.6x Median 1.5x 1.4x 6.9x 5.6x 9.6x 12.8x High 4.8x 4.3x 25.1x 10.4x 15.1x 15.3x Low 0.4x 0.5x 4.2x 3.2x 5.9x 9.6x Implied Valuation From Comparables ($ in millions, except per share data) Multiple Implied EV Equity Value Price/Share LOW HIGH METRIC LOW HIGH Debt Cash LOW HIGH S/O LOW HIGH EV/LTM Sales 1.5x 1.9x 58,199 87,299 112,518 5650 7331 88,980 114,199 5019 $ 17.73 $ 22.75 EV/2013E Sales 1.4x 1.8x 62,727 89,699 114,267 5650 7331 91,380 115,948 5019 $ 18.21 $ 23.10 EV/LTM EBITDA 5.5x 6.9x 23,929 132,206 163,911 5650 7331 133,887 165,592 5019 $ 26.67 $ 32.99 EV/2013E EBITDA 5.6x 6.3x 25,814 143,269 161,770 5650 7331 144,950 163,451 5019 $ 28.88 $ 32.56 EV/LTM EBIT 7.7x 10.0x 17,667 136,475 177,109 5650 7331 138,156 178,790 5019 $ 27.52 $ 35.62 EV/2013E EBIT 9.6x 11.2x 19,065 182,074 212,769 5650 7331 183,755 214,450 5019 $ 36.61 $ 42.72 IMPLIED SHARE PRICE $ 28.78 Overview Thesis Macro/Micro Catalysts/Risk Valuation s
  • 8. 7 Valuation: Discounted Cash Flow Mid-Year Convention Historical Period Projection Period 2009 2010 2011 2012 2013 2014 2015 2016 Sales $35,127.0 $43,623.0 $53,999.0 $57,647.8 $61,659.3 $66,061.4 $70,778.9 $75,834.5 % growth - 24.2% 23.8% 6.8% 7.0% 7.1% 7.1% 7.1% COGS 15,566.0 15,132.0 20,242.0 23,788.2 25,443.6 27,260.1 29,206.8 31,293.0 Gross Profit $19,561.0 $28,491.0 $33,757.0 $33,859.6 $36,215.7 $38,801.3 $41,572.1 $44,541.6 % margin 55.7% 65.3% 62.5% 58.7% 58.7% 58.7% 58.7% 58.7% R&D 5,653.0 6,576.0 8,350.0 313.4 313.6 313.7 313.9 314.0 SG&A 7,931.0 6,309.0 7,670.0 9,847.1 10,532.4 11,284.3 12,090.1 12,953.7 EBITDA $5,977.0 $15,606.0 $17,737.0 $23,699.0 $25,369.8 $27,203.3 $29,168.1 $31,273.8 % margin 17.0% 35.8% 32.8% 41.1% 41.1% 41.2% 41.2% 41.2% Depreciation & Amortization 4,744.0 4,398.0 5,141.0 6,202.6 6,634.2 7,107.8 7,615.4 8,159.3 EBIT $1,233.0 $11,208.0 $12,596.0 $17,496.4 $18,735.6 $20,095.5 $21,552.7 $23,114.5 % margin 3.5% 25.7% 23.3% 30.4% 30.4% 30.4% 30.5% 30.5% Taxes 1,335.0 4,581.0 4,839.0 6,123.8 6,557.5 7,033.4 7,543.5 8,090.1 EBIAT ($102.0) $6,627.0 $7,757.0 $11,372.7 $12,178.1 $13,062.0 $14,009.3 $15,024.4 Plus: Depreciation & Amortization 4,744.0 4,398.0 5,141.0 6,202.6 6,634.2 7,107.8 7,615.4 8,159.3 Less: Capital Expenditures (4,515.0) (5,207.0) (10,764.0) (8,241.8) (8,815.3) (9,444.7) (10,119.1) (10,841.9) Less: Increase in Net Working Capital 330.0 (501.0) 213.0 (8,474.3) (553.7) (607.6) (651.2) (697.8) Unlevered Free Cash Flow $457.0 $5,317.0 $2,347.0 $859.1 $9,443.3 $10,117.6 $10,854.4 $11,644.0 WACC 9.62% Discount Period 0.50 1.5 2.5 3.5 4.5 Discount Factor 0.96 0.87 0.79 0.73 0.66 Present Value of Free Cash Flow $820.6 $8,228.2 $8,042.3 $7,871.0 $7,702.8 Enterprise Value Implied Equity Value and Share Price Cumulative Present Value of FCF $68,763.7 Enterprise Value $157,116.2 NOTE Less: Total Debt 7,331.0 Projections for cash flows Terminal Value Less: Preferred Securities - have been made for 10 UFCF 2021 $16,526.9 Less: Noncontrolling Interest - Perpetuity Growth Rate 2.00% Plus: Cash and Cash Equivalents 5,065.0 years, the first five are shown in the model Terminal Value $221,310.6 Discount Factor 0.40 Implied Equity Value $169,512.2 above. WACC is based Present Value of Terminal Value $88,352.4 on comparable % of Enterprise Value 56.2% Basic Shares Outstanding 5,003.0 companies used in the Fully Diluted Shares Outstanding 5,019.4 comparables analysis. The bear case is shown. 8 Enterprise Value $157,116.2 Implied Share Price $33.77
  • 9. 8 Valuation: Recommendations Football Field Implied Valuation Analysis Price Comparables $28.78 DCF $33.77 Analyst Recommendations Analysis Target Price RBC Capital Markets $24.00 Wells Fargo $39.00 Maxim Group $29.00 JPMorgan $19.00 Recommendation, Entry & Exit Strategy Entry Price: Market Price Target Price: $30.00 Time Horizon: 12 Months Stop Loss $20.00 Overview Thesis Macro/Micro Catalysts/Risk Valuation s

Hinweis der Redaktion

  1. Infineon - Intel's plan to acquire infineon's wireless solutions (WLS)in August, valued at approximately US 1.4B. WLS will operate as IntelMobile Communications, a standalone business division, and will expandintel'sd current wifi and 4g wimax offerings. The acquired tech willbe used in intel core processor based laptops and intel atom process based devices including smart phones netbooks tablets and embedded computers.