Intel’s price target has been raised to $50 from $45 by Jefferies analysts, who maintained their Buy rating on the stock on Wednesday. According to the analysts, PC server trends in the fourth quarter of 2014 and in the first quarter of 2015 suggests “consensus estimates are too low.”
Analysts bullish on Intel
Reports on Taiwan Semiconductor Manufacturing losing share to Samsung are in line with Jefferies’ Moore Stress thesis that Intel and Samsung remain “the last two leading edge semi manufacturers standing,” which “opens the door” for Intel to acquire a share in mobile processors as a foundry supplier to the customers of TSM or a direct supplier to original equipment manufacturers.
JP Morgan analysts assigned an Overweight rating to the stock, suggesting better PC/data center fundamentals, strong capital allocation and margin leverage. Also TheStreet Ratings analysts assigned a Buy rating to Intel stock.
Various other analysts have also assigned ratings to the stock recently. FBR Capital Markets maintained a Buy rating on the chip maker with a price target of $42 in a research note to investors on Tuesday. B. Riley analysts maintained a Buy rating on the stock and assigned it a price target of $40 in a research note on Tuesday. RBC Capital analysts assigned a price target of $40 in a research note to investors on Monday, Jan. 5. Intel presently has an average rating of Hold and a consensus price target of $36.29.
Challenges still remain
Intel is all set to report its fourth quarter results after the market close on Thursday. The chip maker is expected to post a year over year increase in both earnings and revenue. This past holiday season, both PCs and mobile phones saw an increase in demand, which is expected to drive Intel’s revenue performance, according to Nomura analysts in a note on Tuesday. The challenge for the chip maker, however, is not yet over as it is still lagging in year over year comparisons, according to analysts from Nomura, who expect a deceleration in per-share earnings for the company from the first quarter up to the fourth.
Wedbush analyst Betsy Van Hees noted that strong electronics sales and better quarter over quarter data center revenue should help Intel with a “modest beat.” Nomura and Wedbush have reiterated their Neutral ratings on the stock with price targets of $33 and $36 respectively.
