The fourth quarter earnings season has gathered steam with 45 companies about to report their quarterly numbers after the market close today. One company that will attract lots of investor attention tonight is semiconductor giant Intel Corporation (NASDAQ:INTC). Indeed, the semiconductor space has been on fire all year, and as the largest chipmaker in the world Intel is always a key bellwether for the industry as a whole.
So, what should investors expect from Intel’s business update?
B.Riley FBR top analyst Craig Ellis commented, “We project 4Q17 results solidly above Street $16.342B (+1.2%)/ $0.86, but guidance more in line with Street $15.028B (-8.0%)/$0.72 from the big compute bellwether.”
“In our view, 4Q’s macro demand and much of the company-specific backdrop seems favorable, yet 1/4’s side channel security vulnerabilities lend 1Q outlook risk, in our view. Specifically, while we’ve yet to see evidence of malicious activity, we’re concerned with a reflexive Taiwanese PC and server build and chip order slowdown into what’s already a seasonally weak quarter for both applications. We have not seen such datapoints, but will check with mgmt’s and analyze Taiwan monthly Notebook ODM sales. Since we see no change to underlying compute drivers, and since security patches place an overhead processing tax on existing equipment, demand acceleration could emerge even before a re-architected chip is available. A wildcard is longer-term reputation damage, though INTC’s chip, manufacturing, software, and systems expertise are difficult to match and the issue seems to broadly impact other performance oriented PC, mobile, and consumer device processors,” the analyst continued.
As such, Ellis reiterates a Buy rating on Intel shares, with a price target of $53, which implies an upside of 17% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, top analyst Craig Ellis has a yearly average return of 38.4% and a 82% success rate. Ellis has a 11.6% average return when recommending INTC, and is ranked #1 out of 4758 analysts.
The Street largely seems to echo Ellis’ positive sentiment on Intel, considering TipRanks analytics showcase INTC as a Buy. Out of 26 analysts polled in the last 3 months, 17 are bullish on Intel stock, 7 remain sidelined, and only 2 are bearish on the stock.