Market Overview

Intel, Texas Instruments To Kickstart Chip Earnings With 'Better-Than-Feared' Results

Share:
Intel, Texas Instruments To Kickstart Chip Earnings With 'Better-Than-Feared' Results

Major chipmakers Intel Corporation (NASDAQ: INTC) and Texas Instruments Incorporated (NASDAQ: TXN), are scheduled to report earnings next week.

Texas Instruments and Intel are scheduled to report after the close Tuesday and Thursday, respectively. 

The Intel Analyst: Rosenblatt Securities analyst Hans Mosesmann reiterated a Sell rating on Intel with a $45 price target and maintained a Buy rating on Texas Instruments with a $135 price target. 

The Intel Takeaways: Intel is expected to report second-quarter sales slightly above the consensus estimate, which would represent a mid-single-digit sequential decline, Mosesmann said in a Wednesday note.

The broader trends are likely to be better than feared, the analyst said.

He expects quarter-over-quarter declines in the Client Computing Group, or CCG, and the Data Center Group.

The CCG, Mosesmann said, is hit by lower demand for IoT and Mobileye, offset by strong demand from cloud and communication infrastructure customers.

Mosesmann braces for EPS coming in slightly ahead of the $1.11 consensus.

He also painted a less sanguine picture for Intel in the second half, as global GDP contracts, PC total addressable market weakens and data center demand from Enterprise & Government segment softens.

"In addition to the aforementioned trends, we continue to see a multitude of symptoms pertaining to Intel and its business model (here), including Jim Keller's departure, a struggling process technology roadmap, and CPU market share loss to Advanced Micro Devices, Inc. (NASDAQ: AMD)," Rosenblatt said.

See also: Morgan Stanley's Semiconductor Picks: Qualcomm, Qorvo, Lam Research Over Intel, Nvidia

The Texas Instruments Thesis: Rosenblatt expects Texas Instruments to report slightly-above-consensus sales due to less-than-anticipated reduction in orders from customers and better than feared trends during the quarter.

EPS will potentially come slightly above consensus estimates of 86 cents, Mosesmann said.

The analyst forecasts low to mid-teens sequential decline in Analog, which accounts for roughly two-thirds of the company's revenues and the Embedded Processing business.

"We believe the Street will likely focus on the 3Q20 guide, as TI is one of the first semiconductor companies to report and is a decent proxy for the rest of the sector," Mosesmann said.

The analyst sees Texas Instruments as one of the better-positioned semiconductor companies, given its strong financials and its previous experience in weathering a tough macroeconomic environment.

Latest Ratings for INTC

DateFirmActionFromTo
Oct 2020JP MorganMaintainsOverweight
Oct 2020Deutsche BankMaintainsHold
Oct 2020B of A SecuritiesDowngradesNeutralUnderperform

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

 

Related Articles (INTC + TXN)

View Comments and Join the Discussion!

Posted-In: Hans Mosesmann Rosenblatt SecuritiesAnalyst Color Previews Reiteration Analyst Ratings Tech Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com