Intel: Solid PC Demand Set to Drive Q4 Results

Intel (INTC), a semiconductor chip maker, will release its fourth-quarter 2021 upcoming earnings results on January 26.

Though Intel is facing increased competition and component shortages, investors should not give up on the business. The company’s prospects are beginning to improve under new CEO Pat Gelsinger, who has put together a credible turnaround plan. Its new architecture strategy might help Intel stay ahead of the competition.

Expressing his opinion about Intel is Christopher Danely of Citigroup, who expects the company to report a positive earnings surprise in the fourth quarter.

Let’s see why Danely thinks that is so.

Analyst Foresees PC Demand to Benefit Intel

As enterprises replenish their inventories, Danely feels that demand for personal computers and notebooks has remained robust. As a result, Intel is expected to profit in the fourth quarter and beyond.

Danely writes, “Our checks indicate the recent surge in enterprise demand and notebook orders will drive upside to Intel 4Q21 and 1Q22.”

As a result, the analyst increased his sales forecast for 2021 to $73.7 billion from $73.5 billion.

Apart from rising personal computer demand, the analyst believes Intel’s upcoming investor conference on February 17 will likely act as a catalyst for the stock. Intel CEO Pat Gelsinger and other executives will speak at the event on the company’s latest business plan and address investor questions.

Despite the benefits, the analyst feels Intel is facing increased competition in the manufacturing arena, and as a result, the business must focus more on its efforts to be viable in the long-term.

Based on his above thesis, Danely raised his price target by 12% to $58 from $52, but stayed on the sidelines and kept his Neutral rating on the company.

Q4 Expectations

According to experts, Intel is projected to announce adjusted earnings of $0.90 per share in the fourth quarter.

Looking at the chart, we can see that the firm has delivered better-than-expected profitability for the previous four quarters, and it’s likely that it will do so again in Q4.

Wall Street’s Take

On TipRanks, Intel stock commands a Hold consensus rating based on 6 Buys, 12 Holds, and 7 Sells. As for price targets, the average INTC stock price prediction of $55.86 implies almost 2% upside potential from the current levels.

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