Intel (INTC) Earnings Preview: The Countdown Begins


Chip giant Intel (NASDAQ:INTC) will be in the spotlight when it reports first-quarter results next Thursday afternoon. As the countdown to Intel earnings starts, Wall Street’s confidence backing the stock is strong. About 65% of the analysts surveyed by TipRanks have a Buy rating on INTC, and the rest rate the stock as Hold or Sell.

B.Riley FBR’s top analyst Craig Ellis projects strong quarterly execution and an above-Street performance from Intel’s first-quarter results and second-quarter guidance.

Ellis opined, “The [bullish] stance rests on contra-seasonal strength in 1Q’s high-frequency PC supply chain data and off-cycle server and PC hardware and memory reporting laterals. From that, we suspect a few hundred bps of upside to consensus headline sales estimates of $13.06B (-11.7%) and $15.56B (+3.4%) led by Data Center and PC segments where Street estimates are -14.2%/+6.0% and -12.7%/+2.1%, respectively. High historic gross margin correlations to unit volume augur well for GM upside and offset any potential memory pricing and/or 10nm startup cost risks. This take suggests CY18’s $65.0B (+3.5%)/$3.55 revenue and EPS guide should tick higher, albeit more moderately than sharply based on CY17’s lessons.”

“We suspect a $14.0B/+22.0% Y/Y capex view will be retained, despite what may be upward volume pressures. Overall, this means the server and PC bellwether’s update should track much better versus consensus estimates than recent Foundry bellwether TSMC’s iPhone-induced fractional print and significant outlook misses. As such, we believe INTC could help becalm recently-roiled sector investor sentiment and stock volatility if, as we expect, its results show important end markets with broad-based semiconductor and memory demand laterals remain strong,” The analyst continued.

As such, Ellis reiterates a Buy rating on Intel stock, with a price target of $55, which implies an upside of 7% from current levels.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Ellis has a yearly average return of 36% and a 76% success rate. Ellis has a 21.1% average return when recommending INTC, and is ranked #2 out of 4788 analysts.

Out of the 37 analysts polled in the past 12 months, 23 rate INTC a Buy, 11 rate the stock a Hold and 3 recommend Sell. With a return potential of 3%, the stock’s consensus target price stands at $53.04.