Intel (INTC) PT Raised to $55 at Bernstein, Increased Costs Will Reverse in 2H

Bernstein analyst Stacy Rasgon raised the price target on Intel (NASDAQ: INTC) to $55.00 (from $50.00) after the company reported strong Q1 results of $19.8B/$1.45 vs Street consensus of $18.8B/$1.28. These results demonstrated gross margin upside and good opex control, with upside in notebook and datacenter. Guidance for Q2 revenue met expectations but EPS missed with $18.5B/$1.10 vs Street $18.1B/$1.19 on lighter gross margin, 56%, down ~550 bps QoQ. A large part of the weakness was due to pre-qual reserve charges for the forthcoming Tiger Lake launch, however and will reverse themselves once the qualification is completed..

The analyst maintained a Market Perform rating, stating "At this point INTC likely has less idiosyncratic revenue upside into the 2H (which may remove some of the tactical near-term support). But, longer-term bulls might view increased 10nm traction & forthcoming product launches as incremental positives".

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