By Sam Boughedda
Intel's (NASDAQ:INTC) price target was cut from $42 to $40 per share by Susquehanna analyst Christopher Rolland on Tuesday.
Ahead of Intel’s earnings on Thursday, July 28, Rolland said they are cautious on the print “given deteriorating PC demand, as we now expect worse top-line result/guidance.”
“We have received numerous buy-side inquiries as to whether Intel will hit their $18 billion 2Q top-line guidance, or alternatively why they did not negatively preannounce. We note Intel did not give a guidance range, but rather an absolute top-line estimate,” said the analyst. “If indeed revenues are light, perhaps they felt they did not technically miss the bottom end of the range (because none was given), and therefore management did not feel compelled to preannounce.”
Rolland, who reiterated a Neutral rating on the stock and lowered estimates, noted that during a recent conference, Intel management provided some commentary around potentially weakening PC markets.
“Additionally, our ODM notebook tracker points to significantly weaker Taiwanese PC ODM builds in 2Q. Finally, both Gartner and IDC posted softer 2Q22 PC shipment data than the Street’s CCG’s estimates would suggest,” he added.
In addition, Susquehanna believes their “WFH PC Hangover” thesis is beginning to accelerate and has materialized this quarter.
“Beyond the top line, we believe Intel may negatively adjust their full-year gross margin guidance (<52%) and perhaps their capex guidance (given delays in the CHIPS Act and developing end-market headwinds).”