What to Expect From Intel Earnings

Intel introduced the company’s fifth generation processor at this year’s Consumer Electronics Show (CES). Intel’s commitment to smartphone and mobile applications, combined with the resurgence of PC growth last year, made it one of the best large cap value stocks to buy in 2014, and the same outlook can drive the stock this year. Intel trades at 15 times forward earnings, more than in recent years, but still a reasonable multiple for investors looking for growth.

For the settlement date of December 31, Intel saw its short interest fall by 6 million shares to 135.2 million with 5.0 days to cover. The previous level was 141.2 million with 5.1 days to cover. During that time, shares of Intel came close to hitting a 52-week high.

24/7 Wall St. has included some recent analyst calls:

• Jefferies maintained a Buy rating and increased its price target to $50 from $45 on January 14. This is the highest analyst price target.
• FBR Capital Markets reiterated a Buy rating with a $42 price target on January 13.
• B. Riley reiterated a Buy rating with a $40 price target on January 13.

These recent calls were fairly optimistic reflecting how analysts and investors have only recently started catching up to the Intel story. The group of analysts missed the boat in 2014 as well. The consensus analyst price target at the same time last year implied an expected loss of 5.6% or so. Would you consider analysts on the ball if they predicted a drop of more than 5% and shares rose by more than 40% instead?

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The stock currently has a consensus analyst price target of $36.10, which implies only a slight loss to current prices.

The 50-day moving average currently reads at $35.94. In the past week it acted as support and shares bounced off it. The 200-day moving average is immaterial at $31.97.

In Thursday morning’s trading, shares of Intel were up about 1% at $36.75, in a 52-week trading range of $23.50 to $37.90. The market cap is about $177 billion.