HSBC raises Intel: 'Limited downside but still too early to turn bullish'

January 22, 2025 02:37 AM AEDT | By Investing

Google News:

HSBC raises Intel: 'Limited downside but still too early to turn bullish'

Recent News

Coro Expands its Footprint into Australia and New Zealand

Frost & Sullivan Recognizes Leading Organizations with Prestigious 202...

KeyBank Recognized as One of the 50 Most Community-Minded Employers in...

CGTN Documentary "Taiwan Through the Ages: Savoring Nostalgia"

Investing.com -- HSBC upgraded Intel (NASDAQ:INTC) from Reduce to Hold in a note Tuesday, citing limited downside after a correction in the stock.

Since Intel's second-quarter 2024 earnings release, the stock has dropped about 26%, while the PHLX Semiconductor index gained 9%.

HSBC notes that the stock has now met its target price of $20, suggesting it is fairly priced amid ongoing uncertainties.

"We believe the market has priced in the recent uncertainties relating to the execution of the IDM 2.0 strategy as well as top management attrition with CEO Pat Gelsinger resigning in December 2024," HSBC analysts stated.

Intel's upcoming fourth-quarter 2024 earnings are expected to align with market expectations. HSBC forecasts revenue of $13.8 billion, within the guidance range of $13.3 billion to $14.3 billion, matching the consensus estimate.

However, the outlook for the first quarter of 2025 appears less optimistic, according to the bank.

HSBC anticipates a 9% quarter-on-quarter revenue decline, below the consensus estimate of a 6% decline, largely due to potential weakness in the datacenter segment.

"Going into 1Q25e, we believe there could be some downside to revenue," the analysts wrote, adding that they expect this to pressure Intel's gross margin, which they estimate at 38.5%, below the consensus of 39.1%.

HSBC also highlighted ongoing concerns about Intel's foundry strategy. "While we do acknowledge that the worst seems to be over for Intel... it still remains early to have a clear view on its execution leading to overall recovery of the business."

Despite revising their 2025 EPS estimate from $1.19 to $1.04, HSBC maintains a target price of $20, reflecting limited downside. "We wait for clear signs of recovery before we turn bullish on the stock," the analysts concluded.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.