By Michael Elkins
Susquehanna Financial reiterated a Negative rating on Intel Corp . (NASDAQ:INTC) but raised the price target on the stock to $24.00 (from $22.00) ahead of the technology company’s 4Q earnings release. The company is expected to release its 4Q results on Thursday, January 26th.
Susquehanna analysts expect Intel to report results in the lower half of guidance, with 1Q also disappointing the Street. Susquehanna believes that full-year 2023 remains at risk as weakness persists in 1H23, and Data Center remains challenged through the year.
They wrote in a note, “We continue to work through the PC inventory dynamic, as evidenced by IDC 4Q22 PC shipment data down -2.1%, while 4Q ODM builds were down -16.0%. June may ultimately prove to be the first “super-seasonal” quarter as the inventory dynamic normalizes and benefits sell-in.”
Beyond the top line, Susquehanna is confident in Intel’s cost-cutting program, with mitigating opex reductions as early as 4Q. Susquehanna also believes that Intel’s new 2023 guidance could suggest a revised guidance for 2023 revenue to decline mid-to-high single digits versus a Street expectation for a mid-single-digit decline and Intel’s prior 23/24 guidance for mid-to-high-single-digit growth. Susquehanna expects a full-year GM reduction to ~47% from their prior 51%-53%.
Shares of INTC are up 3.44% in mid-day trading on Monday.