By Sam Boughedda
Susquehanna analysts raised the firm's price target on Neutral-rated Intel (NASDAQ:INTC) to $33 from $31 per share in a note Thursday.
Intel is set to report earnings next week, April 27, and the analysts expect the company's results and guidance to be largely in line with Street estimates "as the major resets for Intel are likely behind." However, they note that there could perhaps be another small miss, as PC trends are improving.
"ODM builds have been improving greatly in both February and March (vs. our prior expectations), likely marking the bottom for PC client in 1Q. For 2Q, while we are still below the Street (implying a small miss here), we expect +5% QOQ growth for Client into June, better than typical seasonality (of flat QOQ) given a slowdown in the inventory burn and perhaps eventual inventory replenishment in 2H," the analysts wrote.
Looking ahead, they said they hope Intel will provide 2023 guidance, where revenue should decline more than 20% YoY, or between $47 billion and $50B.
"We expect full-year gross margins to remain depressed given lower utilizations and additional costs associated with modular products," they added. "All said, Intel may post a small miss for both Client and Data Center, but far smaller than prior quarters. Semiconductor investors often "buy the last cut," and we think this may be the last intermediate cut for Intel this downcycle."