What to Expect From Intel Earnings

Technology

Published: October 13, 2015 11:35 am

Intel Corp. (NASDAQ: INTC) is scheduled to report its third-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for $0.59 in earnings per share (EPS) on $14.22 billion in revenue. In the same period of the previous year, it posted EPS of $0.66 and $14.55 billion in revenue.

Earlier this month, ahead of earnings, Canaccord Genuity reiterated a Buy rating with a $39 price target, which is just $1 off Wall Street’s highest analyst price target. Despite the market sell-off, Intel has proven fairly resilient, strengthened by its dividend and long-term data center growth strategy.

This firm remains confident in its long-term thesis, centered on margin accretive Data Center Group (DCG) growth, a sharp cut in Mobile losses in 2016, solid Internet of Things growth and prudent management of the secular personal computer (PC) market decline. Near term, while Canaccord Genuity still believes modest downside risk remains to second half guidance in both the DCG and Client Computing Group, the firm believes investors are well aware of these risks and near-term data points from each business have trended more positive, with solid cloud spending trends and the G.A. release of Skylake.

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Overall, Canaccord Genuity maintained its bullish view, on improving Intel fundamentals highlighted by an increasing mix of revenue and profit driven outside of the PC market. While Mobile losses remain heavy, the firm believes the shift to Cherry Trail and SoFIA products should quickly reduce the need for costly subsidies and dovetail nicely with cost synergy savings from combining the Mobile/PC businesses.

Other analysts weighed in on Intel ahead of earnings as well:

RBC Capital has a Sector Perform rating and raised its price target to $33 from $29.
Pacific Crest reiterated a Buy rating with a $35 price target.
B. Riley reiterated a Buy rating with a $39.50 price target.
Piper Jaffray reiterated a Buy rating.
Wells Fargo reiterated a Buy rating.

So far in 2015, Intel has underperformed the market, with the stock down 9% year to date. However, over the past 52 weeks the stock is up about 4%.

Shares of Intel were up 0.4% at $32.33 late Tuesday morning. The stock has a consensus analyst price target of $33.90 and a 52-week trading range of $24.87 to $37.90.

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