Intel (INTC) shares rallied today, propelled in part by bullish comments from Lehman semiconductor analyst Tim Luke, who raised his target price on the stock to $26 from $24. He maintains an Overweight rating on the stock.

In a research note this morning, Luke wrote that he is “encouraged by orders trends and new product execution” at the company. He says that solid strength in notebooks and servers could make his Q2 and 2008 estimates “conservative.” He sees EPS of 25 cents for the quarter, and $1.20 for the year. Luke also said that the impact on the company from the recent earthquake in China would be modest.

Christopher Danely, an analyst with J.P. Morgan, noted that the company’s Chengdu assembly and test site would be shut down for at least a week due to the quake; he says the facility accounts for 20%-25% of the company assembly and test activities for desktop and mobile processors and chipsets. He thinks the need to scrap some material at the plant could boost cost of goods sold in the current quarter by 25-50 basis points. Danely thinks the company could take a one penny hit to EPS from the effects of the earthquake. He maintains his Neutral rating on the stock.

Intel today is up $1.11, or 4.7%, to $24.95.