Intel Receives Mixed Ratings After Decrease in Revenue Outlook

On March 12, Intel (NASDAQ:INTC) lowered first quarter revenue outlook from $13.7 billion to $12.8 billion. Intel supplies chips for PCs and the outlook decrease represents a weakening demand in the market. Intel has felt the heat as consumers have shifted from PCs to smartphones.

Intel commented in a statement, “The change in revenue outlook is a result of weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain.” Intel attributed the change in demand to “lower than expected Windows XP* refresh in small and medium business” and to “increasingly challenging macroeconomic and currency conditions, particularly in Europe.”

Intel assured that its data center business is meeting expectations and added that the “mid-point of the gross margin range” remains at 60%.
On March 13, analyst Cody Acree of Ascendiant reiterated a Sell rating on Intel with a $24 price target. Acree noted, “Because of Intel’s dominant market share in enterprise computing, the company enjoyed an outsized benefit in 2014 from the temporary strength, but conversely is now likely paying an outsized penalty.”

Cody Acree has rated Intel 9 times since May 2013, earning a 50% success rate recommending the stock and a +5.4% average return per recommendation. Acree has reiterated a Sell rating on Intel 5 times since March 2014. Overall, Acree has a 62% overall success rate recommending stocks with a 22% average return per recommendation.



Separately on March 13, analyst Matt Ramsay of Canaccord Genuity upgraded his rating on Intel from a Hold to a Buy but lowered his price target from $40 to $38. Ramsay is now more confident in Intel’s estimates and dividends. The analyst explained that he previously had a Hold rating on the stock because “Intel’s initial outlook for flat Y/Y PC units in 2015 was too optimistic given the likelihood of less support from enterprise WindowsXP upgrades, increased reliance on consumer notebooks perpetually battling smartphones for share of wallet, and unfavorable FX movements.” Ramsay acknowledged that Intel’s losses “remain heavy,” but he believes “Intel’s modem/SoC technology is gradually closing the gap in a quickly thinning herd of competitors.” Ramsay is upgrading his rating to a Buy because Intel has “reset PC expectations to what we believe will prove much more realistic (even beatable?) levels” so investors do not have to fear “a false PC bottom.”

Matt Ramsay has rated Intel 7 times since June 2014. The analyst reiterated a Hold rating 6 times, giving him a 0% success rate and a 0% average return. Overall, Matt Ramsay has a 69% success rate recommending stocks with a +7.3% average return per recommendation.



On average, the top analyst consensus for Intel on TipRanks is Hold.