Business & Investment

Intel’s revenue is just an appetizer that precedes the actual meal next month.

Intel Corp. will announce a recovery in data center sales on Thursday, but rebounds could be pushed away as Wall Street seeks answers to larger questions.

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We plan to report third quarter earnings on Thursday after the market closes. However, many analysts have already seen Thursday’s report on Intel’s November 18th Analyst Day, which already stood as an looming hurdle for Intel to clear. When the company reported revenue 3 months ago..

As a small rival, Advanced Micro Devices Inc., data center sales in the third quarter will be important.
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Shows a strong increase while Intel reports a decrease: First 20% or more reduction In the first quarter, then 9% reduction better than fear In the second quarter. Data center sales are expected to recover in the third quarter, with analysts expecting $ 6.66 billion, an increase of nearly 13%.

However, analysts are focusing on long-term data that is expected to arrive at later events. Evercore ISI analyst CJ Muse expects the next Beat and Raise quarter in a note, but Thursday’s report is mostly because he didn’t expect “still too many questions in the air.” He said it would be “non-event”. The company that answers this week.

Do not miss it: Intel CEO Pat Gelsinger wants to get Apple back by beating Apple.

“The biggest issues this quarter are about supply chain dynamics, sustainability of demand trends, product cycle rhythms, updates on Intel’s IDM 2.0 strategy, and margin trends,” said an inline valuation and $ 60. Muse, who has a price target, says. Intel inventory.

“Thus, we are waiting for something clearer and more reliable for the company, so we continue to take a wait-and-see approach to the name. [free cash flow] IDM 2.0 Global Outlook-Most of the incremental commentary is expected to be available during the company’s November Analyst Day, rather than the next print, “Muse said. ..

What to look for

Revenue: Of the 37 analysts surveyed by FactSet, Intel is expected to average $ 1.11 per share, or adjusted earnings that have been flat for the past year. Intel forecasts $ 1.10 per share. Estimize, a software platform that uses crowdsourcing from hedge fund executives, brokerage firms, buy-side analysts and more, is seeking adjusted earnings of $ 1.18 per share.

Revenue: Wall Street expects to generate $ 18.24 billion from Intel, according to 30 analysts polled by FactSet. This will be down from the $ 18.33 billion reported in the year-ago quarter. Intel forecasts revenue of $ 18.2 billion. Estimize expects to generate $ 18.55 billion in revenue.

Analysts surveyed by FactSet expect revenue from the traditional PC group, Client Computing, to be $ 9.6 billion. Non-volatile memory solution revenue is $ 1.01 billion. “Internet of Things” or IoT, $ 998.3 million in revenue. Mobileye’s revenue is $ 360.4 million.

Inventory movement: If Intel exceeds expectations, don’t expect automatic bounces. Intel’s share price fell as it exceeded Wall Street’s expectations in the last five quarterly earnings reports.

Intel’s share price fell 5.1% overall in the third quarter.Average of 30 Dow Jones Industrial Averages during the same period

Count Intel as a component — down 1.9%, S & P 500 Index
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Advanced 0.2%, technology-intensive Nasdaq Composite Index
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0.4% decrease, PHLX Semiconductor Index
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Slided 2.6%.

What the analyst is saying

Morgan Stanley analyst Joseph Moore, who has been rated overweight by Intel, agrees with Muse, and the low number of PCs has already been incorporated into his predictions, “all eyes.” Said it was at a meeting in November.Last week, a research firm reported Slow PC sales growth Due to an ongoing chip shortage and supply chain issues.

On Analyst Day, Moore said the most controversial issue would be Intel’s gross profit. Moore expects gross profit to stabilize, but Intel has now said it needs to come before the negatives.

“If there is something from the analyst meeting that investors may consider negative about gross profit, fixed investment, or product timing, the company should try to get rid of that negative color with this revenue call. The company believes the stock could sell out on Analyst Day. ”

read: The tech revenue boom is raging as Apple and Amazon face the same problems as everyone else.

Cohen analyst Matthew Ramsey has set a price target of $ 80 above the rating and expects the stock to be “significantly rangebound” between now and mid-November. We are also paying attention to the issue of gross profit.

“But the 4Q21 gross margin guidance will be an important indicator for investors to monitor,” said Ramsey. “55.0% implicit organic 4Q21 GM (after considering a one-time charge of $ 300 million) to more clearly benchmark the trajectory that 2022 and 2023 could come to Analyst’s Day. It will be the starting point for. “

Intel is the lowest choice of 10 chip stocks covered by Citi Research’s Christopher Danley, with a neutral valuation and a $ 57 price target. Danley expects Intel to be most affected by the slowdown in the PC end market and the continued loss of data center market share to AMD.

Of the 40 analysts covering Intel, 15 buy, 15 hold, 10 sell, with an average price target of $ 61.83.

Intel’s revenue is just an appetizer that precedes the actual meal next month. Intel’s revenue is just an appetizer that precedes the actual meal next month.

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