Deutsche Bank Markets Research Rating Buy Company Intel Date 21 November 2013 Forecast Change Nca t h i k mei lc a United States E•driailve Price at 21 Nov 2013 (USD) 25.22 T INTC 00 INTC US NSM INTC Price target 28.00 Semiconductors 52-week range 25.47 - 19.53 Highlights from Analyst Day Rod. 7*Niii,:re. Taking the gloves off INTC's analyst mtg began with the Chairman stating that to his personal embarrassment the co had "lost its way". We believe this powerful admission was a positive first step toward INTC returning to growth, with the new CEO's aggressive stance toward entering new mkts further supporting this strategic change. While successful execution on this strategy remains paramount, we believe INTC can return to growth in 2H14/15 as the PC mkt stabilizes and share gains emerge in tablets, phones, foundry etc. Even incremental success in these areas should yield above consensus rev/EPS and a rising share price. Reiterate Buy rating and raise P/T to $28. Manufacturing advantage underpins product success Despite some initial yield issues, Intel believes it can scale transistor costs at 14nm and drive a significant gap between itself and the leading foundry. We believe the lower transistor cost will enable the company to better compete in lower priced segments of the PC, tablet, and eventually the smartphone market. The company outlined goals to boost share in entry level PC from 50% today, ship 40m tablets SoCs (+400% y/y), return to "double digit" growth in DCG, and drive growth in the convertible PC category. Trim estimates on revised 2o1a guidance Intel guided 2014 revenue to be flat y/y as growth DCG is offset by a decline PCG. GM is expected to be flat as lower startup charges is offset by increased spending on tablets. The company committed to keep opex flat but we are disappointed the company did not rationalize investment given another year of flat/declining revenue. We note Intel investment since 20