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Susquehanna Financial Group’s Christopher Rolland this morning reiterates a “Positive” rating on shares of Intel (INTC), and a $45 price target, writing that the “setup” for Thursday’s Q1 report is “interesting,” given trends have improved in the personal computer market, while the expectations of investors are “weak."

"While we acknowledge that our 1Q17 estimate is one of the highest on the Street, we believe Intel could see upside in its PC business driven by better product mix and a slightly better than expected PC environment,” he writes.

Rolland expresses enthusiasm for a Q1 beat on revenue, even though he trimmed some numbers for this quarter because of competitor Advanced Micro Devices’s (AMD) progress with its newer “Ryzen” PC chips.

Rolland notes trends in PCs have been improving, while expectations are low:

Today, we preview Intel, which we believe will benefit from an improving PC backdrop and better CPU mix. Additionally, we take this opportunity to update our estimates for notebook ODM shipments, which we anticipate to have been down -14.7% QOQ (better than our prior estimate of -17.2%) and now are tracking down -2% YOY for 2017 (versus Intel’s guidance for -5%). Additionally, in our PC-SIGnals report, we noted positive mix trends as we found increasing core i5 and i7 usage in desktops and laptops, which likely have a beneficial impact on overall client ASPs. For DCG, while hyperscale revenue can be lumpy, we believe that one large hyperscale customer over-ordered CPUs in 3Q16, did not order any in 4Q16, but reordered in 1Q17, potentially creating more reasonable sequential comps for Intel in 1Q17 (and a higher starting run-rate for 2Q17 guidance). While Intel’s opex guidance was disappointing for many, we note $0.15-0.20 of EPS leverage if units are flat versus -5%.

For Q1’s results, he sees $14.9 billion in revenue, slightly ahead of consensus for $14.808 billion.

For Q2, he models $14.65 billion in revenue, still above the consensus $14.34 billion, though he cut his EPS estimate to 68 cents from 71 cents, though that is still above the average 64-cent estimate.

Writes Rolland of AMD, "While Ryzen is still early in its launch, we acknowledge that AMD has gained some mind share from both consumers and Intel."

"In response, we have seen Intel accelerate Coffee Lake (a third 14nm tock) and media speculation that Intel is lowering prices."