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Intel Q2 Preview: Can the Earnings Streak Continue?
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The iShares Semiconductor ETF (SOXX) has struggled to find its footing in 2022, declining more than 25% in value. The chart below illustrates the year-to-date performance of the ETF.
Image Source: Zacks Investment Research
One company part of the iShares Semiconductor ETF is the widely-known Intel (INTC - Free Report) . In addition, the company is slated to release its quarterly results on July 28th (Thursday) after the trading session ends.
Intel is the world’s largest semiconductor company and is a primary supplier of microprocessors and chipsets. Recently, the company has been slowly reducing its dependence on the PC-centric business by moving into data-centric businesses — such as AI and autonomous driving.
Let’s take a look at how the semiconductor titan shapes up heading into its quarterly release.
Share Performance & Valuation
Sellers have controlled Intel shares for the majority of 2022, declining more than 20% in value and underperforming the general market by a wide margin.
Image Source: Zacks Investment Research
However, it seems that the bears have started to lose grip over the last month, with Intel shares tacking on a marginal 1.4% and primarily trading in line with the general market.
Image Source: Zacks Investment Research
The recent price action is definitely inspiring, as it signals that the selling has slowed down immensely.
In addition, Intel boasts stellar valuation metrics, further displayed by its Style Score of an A for Value.
The company’s 11.3X forward earnings multiple is nicely below its five-year median of 12.1X and represents an enticing 37% premium relative to the S&P 500.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish for the quarter to be reported, with four negative estimate revisions hitting the tape over the last 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus EPS Estimate resides at $0.74, notching a 42% decrease in quarterly earnings year-over-year.
Top-line projections display some softening as well – Intel is forecasted to generate $17.9 billion in revenue for the quarter, displaying a 9% decrease from year-ago sales of $19.6 billion. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Quarterly Performance & Market Reaction
Intel has been on a blazing hot earnings streak - the company hasn't reported bottom-line results below the Zacks Consensus EPS Estimate since 2014. Just in its latest quarter, the company exceeded the Zacks Consensus EPS Estimate by a solid 9%.
Quarterly sales numbers have been just as stellar; Intel has surpassed top-line estimates in 13 consecutive quarters.
Even if the company does register an EPS beat, watch out – shares have moved downwards following each of Intel’s previous nine bottom-line beats dating all the way back to 2020.
Bottom Line
Quarterly estimates indicate a decreasing top and bottom-line. In addition, shares have struggled for the greater part of 2022 but have found some buyers over the last month.
Intel has consistently reported top and bottom-line results above expectations, but the market has historically reacted poorly to EPS beats. Furthermore, the company sports rock-solid valuation levels.
Heading into the quarterly report, Intel (INTC - Free Report) is a Zacks Rank #4 (Sell) with an Earnings ESP Score of -9%.
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Intel Q2 Preview: Can the Earnings Streak Continue?
The iShares Semiconductor ETF (SOXX) has struggled to find its footing in 2022, declining more than 25% in value. The chart below illustrates the year-to-date performance of the ETF.
Image Source: Zacks Investment Research
One company part of the iShares Semiconductor ETF is the widely-known Intel (INTC - Free Report) . In addition, the company is slated to release its quarterly results on July 28th (Thursday) after the trading session ends.
Intel is the world’s largest semiconductor company and is a primary supplier of microprocessors and chipsets. Recently, the company has been slowly reducing its dependence on the PC-centric business by moving into data-centric businesses — such as AI and autonomous driving.
Let’s take a look at how the semiconductor titan shapes up heading into its quarterly release.
Share Performance & Valuation
Sellers have controlled Intel shares for the majority of 2022, declining more than 20% in value and underperforming the general market by a wide margin.
Image Source: Zacks Investment Research
However, it seems that the bears have started to lose grip over the last month, with Intel shares tacking on a marginal 1.4% and primarily trading in line with the general market.
Image Source: Zacks Investment Research
The recent price action is definitely inspiring, as it signals that the selling has slowed down immensely.
In addition, Intel boasts stellar valuation metrics, further displayed by its Style Score of an A for Value.
The company’s 11.3X forward earnings multiple is nicely below its five-year median of 12.1X and represents an enticing 37% premium relative to the S&P 500.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish for the quarter to be reported, with four negative estimate revisions hitting the tape over the last 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus EPS Estimate resides at $0.74, notching a 42% decrease in quarterly earnings year-over-year.
Top-line projections display some softening as well – Intel is forecasted to generate $17.9 billion in revenue for the quarter, displaying a 9% decrease from year-ago sales of $19.6 billion. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Quarterly Performance & Market Reaction
Intel has been on a blazing hot earnings streak - the company hasn't reported bottom-line results below the Zacks Consensus EPS Estimate since 2014. Just in its latest quarter, the company exceeded the Zacks Consensus EPS Estimate by a solid 9%.
Quarterly sales numbers have been just as stellar; Intel has surpassed top-line estimates in 13 consecutive quarters.
Even if the company does register an EPS beat, watch out – shares have moved downwards following each of Intel’s previous nine bottom-line beats dating all the way back to 2020.
Bottom Line
Quarterly estimates indicate a decreasing top and bottom-line. In addition, shares have struggled for the greater part of 2022 but have found some buyers over the last month.
Intel has consistently reported top and bottom-line results above expectations, but the market has historically reacted poorly to EPS beats. Furthermore, the company sports rock-solid valuation levels.
Heading into the quarterly report, Intel (INTC - Free Report) is a Zacks Rank #4 (Sell) with an Earnings ESP Score of -9%.