Dow component Intel Corp. (INTC) reports Q4 2021 results after Wednesday’s closing bell, with analysts forecasting a profit of $0.91 per-share on $18.36 billion in revenue. If met, earnings-per-share (EPS) will mark a 40% decline in profits compared to the same quarter last year. The stock fell 11.7% in October after missing Q3 revenue estimates and lowering Q4 EPS guidance, and has traded sideways below 200-day moving average resistance for the last three months.
Competitors Take Market Share
Intel’s problems are well documented, with poor management causing rollout delays in key product lines. The failures have allowed competitors NVIDIA Inc. (NVDA) and Advanced Micro Devices Inc. (AMD) to take market share that’s unlikely to return in the next three to five years. INTC has responded by shifting focus to foundry construction, in order to meet the worldwide chip shortage. Although vital to the industry’s survival, this segment will generate lower margins going forward.
KeyBanc Capital Markets analyst John Vinh just posted a cautious outlook, noting “While we are still optimistic INTC will ultimately be able to turn things around long-term, IDM 2.0 and IFS represent long-lead time initiatives that we believe will take longer than we had originally anticipated to yield proof points. Additionally, with Sapphire Rapids being delayed again, we see limited catalysts for the stock on the horizon. While INTC does have an analyst event in February, we’re skeptical any announcement can change the bearish narrative.”
Wall Street and Technical Outlook
Wall Street consensus stands at a ‘Hold’ rating based upon 8 ‘Buy’, 2 ‘Overweight’, 21 ‘Hold’, and 3 ‘Underweight’ recommendations. More importantly, 6 analysts recommend that shareholders close positions and move to the sidelines. Price targets currently range from a low of $40 to a Street-high $80 while the stock will open Wednesday’s session about $3 below the median $55 target. These metrics are telling bulls and bears to lower their expectations, heading into the report.
Intel broke out above long-term resistance in the 30s in 2017, lifting into the upper 50s in 2018. It mounted that barrier in 2020 but the rally failed, yielding a decline that found support at a nearly horizontal 4-year trendline in the mid-40s. The stock failed an April 2021 breakout attempt and is now situated about 6 points above trendline support. Sadly, it’s now trading at the same level first hit in February 2018, yielding zero returns before dividends.
Catch up on the latest price action with our new ETF performance breakdown.
Disclosure: the author held no positions in aforementioned securities at the time of publication.
This article was originally posted on FX Empire
More From FXEMPIRE:
