7 Intel Analysts Focus On Q3 Earnings, Cost-Cutting Plan

Zinger Key Points
  • Macro challenges are likely to continue well into 2023, an analyst says.
  • Intel plans significant headcount reductions and canceling of some products to curtail costs, another analyst states.
7 Intel Analysts Focus On Q3 Earnings, Cost-Cutting Plan

Intel Corporation INTC reported Thursday its third-quarter results, with revenue of $15.3 billion, down 20% year-over-year. The semiconductor major had earnings of 59 cents in the quarter, significantly ahead of Street expectations.

Rosenblatt Securities On Intel

Analyst Hans Mosesmann maintained a Sell rating and a price target of $20.

“Lots of moving parts in the 3Q22 print that would have been missed entirely if not for the 40% sequential sales increase in desktop CPUs, which we view as a tad above end consumption,” Mosesmann wrote in a note.

The analyst mentioned, however, that the company issued a “weak outlook across the board,” and that the macro challenges could continue well into 2023. “Intel’s business model will be challenged with multiple years of share losses in data center regardless of a recovery in the PC market,” he added.

Needham On Intel

Analyst Quinn Bolton reiterated a Buy rating, with a price target of $32.
Intel has lowered the full-year guidance, “as weakness broadens beyond initial expectations,” Bolton said in a note.

“Intel is taking aggressive action to reduce costs across COGS and OpEx that should drive $3bn in savings in CY23 and $8-$10bn by end of CY25,” the analyst wrote. “These efforts include significant headcount reductions and canceling of some products,” Bolton added.

Check out other analyst stock ratings.

Raymond James On Intel

Analyst Melissa Fairbanks reaffirmed a Market Perform rating on the stock.

“There remains considerable uncertainty regarding the longer-term strategy, but we believe near-term expectations have generally been de-risked — the outlook for 2023 now assumes a ~10% in Client unit volumes, while also factoring in share losses in Datacenter,” Fairbanks wrote.

“We believe the cost reduction efforts will also be well-received, helping to fund the longer-term manufacturing strategy,” she added.

Benchmark On Intel

Analyst Cody Acree maintained a Hold rating.

Intel’s results were a tad short of the mid-point of its guidance and in line with expectations, Acree mentioned.

“With inflation in the U.S., the situation in Europe, with energy and the war, and the softer Asian economy, so against that backdrop, we're still looking to have the economic headwinds as we go into next year,” Acree further wrote.

KeyBanc Capital Markets On Intel

Analyst John Vinh reiterated a Sector Weight rating on Intel.

“INTC posted strong 3Q results, benefiting from customer pull-ins ahead of 4Q price increases, while 4Q guidance was below expectations as PC demand deteriorates, enterprise weakens, and China remains weak,” Vinh wrote in a note.

“We view Intel as one of the best-positioned companies to benefit from the expansion of edge compute, datacenter compute, AI/ML, autonomous things, and 5G-enabled-compute, a likely decade-long expansion of compute applications that should drive outperformance,” he added.

Truist Securities On Intel

Analyst William Stein reaffirmed a Hold rating while reducing the price target from $40 to $29.

Intel’s third-quarter results were mixed, “but weak demand, excess supply and, perhaps, a kitchen sink takes the Q4 outlook well below consensus,” Stein said.

“Longer-term INTC claims it remains on schedule to deliver 5 nodes in 4 years,” the analyst wrote. “If we could gain confidence in INTC's ability to execute these plans, we might turn constructive, but that's tough considering recent history,” he added.

Morgan Stanley On Intel

Analyst Joseph Moore maintained an Underweight rating while reducing the price target from $36 to $29.50.

“The Intel quarter was better than feared for 3Q, with negative revision to full-year roughly in line with management's characterization in mid-quarter,” Moore stated.

“The company is moving to take costs out relative to their prior forecast, but there is still a wide range of 2023 assumptions,” he added.

INTL Price Action: Shares of Intel had risen by 8.68% to $28.58 at the time of publication Friday.

Read More: Intel Shares Jump On Cost Cutting Measures, Mobileye IPO Despite Revenue Miss, Weak Guidance

Photo: Weldon Kirsch, courtesy Intel

Posted In: BenchmarkCody AcreeHans MosesmannJohn VinhJoseph MooreKeyBanc Capital MarketsMelissa FairbanksMorgan StanleyNeedhamQuinn BoltonRaymond JamesRosenblatt SecuritiesTruist SecuritiesWilliam SteinAnalyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsTechTrading Ideas