Intel (INTC) Stock: Rosenblatt Expects a Modest 3Q Beat

Rosenblatt analyst Hans Mosesmann has previewed Intel’s (NASDAQ: INTC) 3Q earnings. The analyst expects Intel to report revenue and EPS ahead of the consensus that is calling for sales and non-GAAP EPS to be slightly above the consensus estimates of $18.3 billion and $1.12, respectively.

“We see the slight beat coming from DCG (slight increase q/q), while CCG declines q/q. We expect CEO Pat Gelsinger to address a few topics on the conference call, including: PC demand for Q4 and 2022, an update on industry wide supply constraints, and a processor roadmap update. For the December guide, we see revenue and EPS coming in slightly above our/consensus $18.2 billion/$18.4 billion and $1.00/$1.03 estimate. We see data center revenue providing slight upside, partly as a result of Intel being less constrained than peers, which is the result of a weak server portfolio ahead of 1H22 Sapphire Rapids (delayed) launch,” Rosenblatt said in a client note.

“We continue to see Intel's data center roadway for 2022 as part of a process to catch up with AMD, but the dynamic, at best, doesn't stabilize or move to Intel's advantage until 2024. We acknowledge Intel's PC portfolio should improve dramatically in 2022, which should be interesting to watch, but see it as detrimental to gross margins on die size, yield, and lack of a chiplet road map. At a higher level, investors may not be eager to play the PC recovery narrative just on the basis of its unlikely secular growth prospects.”

The analyst rates Intel with a Sell rating and a $40.00 per share price target.

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