This Thursday, all eyes will be on Intel (NASDAQ:INTC) as it unveils its first-quarter 2024 results following the close of trading. The spotlight will particularly be on Intel’s new reporting structure, which segregates Intel Products from Intel Foundry.
Despite this organizational shift, Bernstein analyst Stacy Rasgon has made only slight adjustments to his forecasts. Rasgon maintains his Q1 estimates, projecting revenue to hit $12.75 billion and adjusted EPS to stand at $0.13, closely aligning with the consensus figures of $12.72 billion and $0.13, respectively.
Looking ahead to Q2, Rasgon’s projections are marginally tweaked to $13.5 billion in revenue and $0.23 in adjusted EPS, a slight improvement from previous expectations but still slightly below the Street’s consensus of $13.6 billion and $0.24, respectively.
Rasgon’s Q1 expectations factor in slight year-over-year growth in the PC market (up ~1-5% y/y in Q124), which come in the wake of several quarters of declines and stagnation.
Don’t get too excited, however, appears to be Rasgon’s message, regarding this uptick. “PCs returning to (even a little bit of) YoY growth might be welcome, though overall still appear somewhat anemic, and CPUs appear to have overshipped again in Q4 which may bring risk into the first half of the year especially given the company’s current call for an ‘above-seasonal Q2’ and an effective 2H hockey stick,” he goes on to say.
While Rasgon notes server CPUs may have reached a point where they’re no longer deteriorating, he still thinks the segment is not all that healthy, believing share losses “appear to have resumed, with shift of spend toward GPUs remaining a problem.” In that regard, the narrative surrounding AI still seems lacking for Intel, says Rasgon, especially given announcements about the performance of Gaudi 3 are “straining our credulity.”
Meanwhile, the fact the foundry business’ losses are exacted to peak this year and gradually get better from here on in finally “cement the reality that the turnaround is only just getting started.”
So, what should investors do with all that? Simply, says Rasgon, “Right now we think the answer is probably ‘nothing.’”
To this end, Rasgon rates INTC shares a Market-Perform (i.e., Neutral), while his $42 price target implies ~22% from current levels. (To watch Rasgon’s track record, click here)
Most on the Street agree with Rasgon’s stance. Based on 25 Holds vs. 5 Buys and 4 Sells, the consensus view is that this stock is a Hold. Meanwhile, the average target price of $44.17 indicates a potential one-year return of 28%. (See Intel stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
