Is Intel Stock a Buy, Hold or Sell After Earnings?
Intel stock is moving higher Friday after the embattled chipmaker gave upbeat Q4 guidance, but Wall Street is staying on the sidelines for now.
Intel (INTC) stock is one of the best Dow Jones stocks on Friday, second only to Amazon.com (AMZN) which is rallying on its solid earnings report. The positive price action comes after the chipmaker reported mixed results for its third quarter but issued a strong outlook for the fourth quarter.
In the three months ended September 28, Intel's revenue decreased 6.3% year over year to $13.3 billion. It reported a net loss of 46 cents per share compared to net earnings of 41 cents per share in the year-ago period.
"Our Q3 results underscore the solid progress we are making against the plan we outlined last quarter to reduce costs, simplify our portfolio and improve organizational efficiency," said Intel CEO Pat Gelsinger in a statement. "We delivered revenue above the midpoint of our guidance, and are acting with urgency to position the business for sustainable value creation moving forward."
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The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $13 billion and a net loss of 2 cents per share, according to MarketWatch.
However, sentiment turned positive toward Intel when the company provided its outlook for the fourth quarter. Intel said it expects to achieve revenue in the range of $13.3 billion to $14.3 billion and earnings of approximately 12 cents per share, which came in ahead of expectations.
Wall Street is forecasting revenue of $13.7 billion and earnings of 8 cents per share for Intel's fourth quarter, according to Yahoo Finance.
"The actions we took this quarter position us for improved profitability and enhanced liquidity as we continue to execute our strategy," Gelsinger said. "We are encouraged by improved underlying trends, reflected in our Q4 guidance."
Is Intel stock a buy, sell or hold?
Intel's troubles have stretched to the price charts, as well. Shares of the large-cap stock are down 53% for the year to date on a total return basis (price change plus dividends), making it the worst Dow stock of 2024 so far.
And Wall Street is on the sidelines when it comes Intel. According to S&P Global Market Intelligence, the average analyst target price for INTC stock is $24.72, representing implied upside of 6% to current levels. Meanwhile, the consensus recommendation is Hold.
Financial services firm Needham is one of those with a Hold rating on INTC stock.
While Intel's third-quarter revenue results were better than expected, accelerated foundry development is weighing on near-term margins, says Needham analyst Quinn Bolton.
"We rate INTC as a Hold due to its elevated valuation, falling revenue estimates, increasing competition (in core and non-core markets), and distant Intel Foundry Services revenue contributions, which we believe are all setting up for a more difficult road ahead," the analyst adds.
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