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Intel (INTC) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Intel (INTC) closed at $58.27, marking a +1.34% move from the previous day. This change lagged the S&P 500's 1.47% gain on the day. At the same time, the Dow added 2.32%, and the tech-heavy Nasdaq gained 1.2%.

Coming into today, shares of the world's largest chipmaker had lost 6.81% in the past month. In that same time, the Computer and Technology sector gained 4.26%, while the S&P 500 gained 0.74%.

INTC will be looking to display strength as it nears its next earnings release, which is expected to be July 23, 2020. In that report, analysts expect INTC to post earnings of $1.10 per share. This would mark year-over-year growth of 3.77%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.51 billion, up 12.17% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.81 per share and revenue of $73.94 billion. These totals would mark changes of -1.23% and +2.75%, respectively, from last year.

Any recent changes to analyst estimates for INTC should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. INTC currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that INTC has a Forward P/E ratio of 11.95 right now. For comparison, its industry has an average Forward P/E of 33.72, which means INTC is trading at a discount to the group.

We can also see that INTC currently has a PEG ratio of 1.59. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor - General industry currently had an average PEG ratio of 3.03 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 23, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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