It’s been a pretty great week for Intel Corporation (NASDAQ:INTC) shareholders, with its shares surging 15% to US$68.47 in the week since its latest full-year results. The result was positive overall – although revenues of US$72b were in line with what analysts predicted, Intel surprised by delivering a statutory profit of US$4.71 per share, modestly greater than expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Intel from 37 analysts is for revenues of US$73.7b in 2020, which is a credible 2.5% increase on its sales over the past 12 months. Statutory per share are forecast to be US$4.74, approximately in line with the last 12 months. In the lead-up to this report, analysts had been modelling revenues of US$72.2b and earnings per share (EPS) of US$4.46 in 2020. It looks like there’s been a modest increase in sentiment following the latest results, with analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that analysts have increased their price target for Intel 15% to US$66.59 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Intel, with the most bullish analyst valuing it at US$90.00 and the most bearish at US$45.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Intel’s performance in recent years. We would highlight that Intel’s revenue growth is expected to slow, with forecast 2.5% increase next year well below the historical 6.2%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 8.2% per year. So it’s pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Intel.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Intel following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Still, the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Intel going out to 2022, and you can see them free on our platform here..
It might also be worth considering whether Intel’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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