“Do Intel numbers even matter at this point?” That is the question Bernstein analyst Stacy Rasgon—who has a five-star rating on TipRanks—recently asked ahead of chip stock Intel’s (INTC) earnings report coming out. And while Rasgon has a point, the numbers likely do still matter, at least to some investors. They certainly matter to the investors who bought in on Intel shares today, sending said shares up fractionally in Monday afternoon’s trading.
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Rasgon’s case for investors not caring about numbers so much is valid enough. Basically, Rasgon asserts, no one is looking very closely at Intel’s numbers right now, because most of Intel’s value is in its future. With a new CEO at the helm and running roughshod through the company’s workforce, and with new developments in the pipeline and plans to bolster sales incoming, the question is not so much about how Intel did, but how it will do.
And this is reasonable. Intel’s current performance is kind of baked in already. Most investors know that Intel has been falling apart for months, if not years at this point. Much of the last quarter was about starting a turnaround with the arrival of Lip-Bu Tan, the new CEO, who took over back in March. As much as Tan has done so far, this is still his first quarter with Intel. Even the most exacting investor can only expect so much out of a new CEO’s first quarter.
What Other Analysts Think
While certainly, Intel right now is much more about future than present, the numbers still have to be considered. And right now, a lot of analysts are looking at Intel’s foundry division as it may announce a manufacturing change, abandoning the 18A node to focus on the 14A node instead. There is value in such a decision, but it could still mean billions of dollars lost in technology write-offs, reports note.
The consensus price target is currently around the $22 level, which is just a bit off of current prices. The average analyst looks for Intel to turn in quarterly revenue of $11.93 billion, which is a 7% loss against this time last year. Adjusted net income will also be slightly down in absolute terms, from $83 million last year to $74.5 million this year. In both cases, however, that represents $0.02 per share.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 30.78% loss in its share price over the past year, the average INTC price target of $21.74 per share implies 6.82% downside risk.
