Is Intel Likely to Beat on Q2 Earnings? ETFs in Focus
Intel INTC is scheduled to report second-quarter 2023 results on Jul 27 after market close. Let’s take a closer look at its fundamentals ahead of the earnings release.
Intel has risen about 14% in the past three months, underperforming the industry average growth of 40.4%. The rally is likely to continue, given that Intel has a solid chance of beating estimates this time around (see all the Technology ETFs here).
This has put the ETFs having a substantial allocation to the world’s biggest semiconductor maker — First Trust Nasdaq Semiconductor ETF FTXL, First Trust NASDAQ Technology Dividend Index Fund TDIV, Invesco PHLX Semiconductor ETF SOXQ, iShares Semiconductor ETF SOXX and VanEck Vectors Semiconductor ETF SMH — in focus ahead of its Q2 earnings.
Earnings Whispers
Intel has an Earnings ESP of +19.64% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The world’s largest chipmaker saw no earnings estimate revision over the past 30 days for the to-be-reported quarter. The Zacks Consensus Estimate for the second quarter indicates a substantial year-over-year earnings decline of 113.8% and revenue decline of 21.5%. However, the earnings track record of the company is robust, as it delivered a four-quarter average earnings surprise of 10.14%.
Intel belongs to a top-ranked Zacks industry (in the top 32%). The Zacks Consensus Estimate for the average target price is $31.93, with nearly 68% of the analysts giving a Hold rating ahead of the company’s earnings.
What to Watch?
Intel has been left behind in the artificial intelligence (AI)-led surge seen in semiconductor stocks like Nvidia NVDA and Advanced Micro Devices AMD. The chipmaker is yet to enter the emerging and hottest AI market (read: Chip ETFs on Track for Their Best First Half on Record).
For the to-be-reported quarter, Intel projects revenues in the range of $11.5 billion to $12.5 billion, while loss is expected to be about 4 cents per share. The chipmaker continued to suffer from cooling demand for its chips used in personal computers. Shoppers chose to hold on to the laptops and desktops they purchased at the peak of the pandemic.
ETFs to Watch
First Trust Nasdaq Semiconductor ETF (FTXL)
First Trust Nasdaq Semiconductor ETF offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. FTXL holds 31 stocks in its basket, with Intel taking the second spot at 8.9% share (read: Semiconductor ETFs in Focus Ahead of Q2 Earnings).
First Trust Nasdaq Semiconductor ETF has $1.2 billion in AUM. The average trading volume is light at around 79,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1.
First Trust NASDAQ Technology Dividend Index Fund (TDIV)
First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. It holds about 92 securities in its basket. Of these firms, Intel takes the fourth spot, making up for 8% of the assets. From a sector look, about 37% of the portfolio is dominated by semiconductors & semiconductor equipment, followed by software, and technology hardware, storage & peripherals.
First Trust NASDAQ Technology Dividend Index Fund has amassed $2 billion in its asset base while trading in a volume of around 110,000 shares per day. It charges 50 bps in annual fees.
Invesco PHLX Semiconductor ETF (SOXQ)
Invesco PHLX Semiconductor ETF offers exposure to companies engaged in the semiconductor business. It tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. Of these firms, Intel occupies the fourth position with a 7.5% share.
Invesco PHLX Semiconductor ETF has accumulated $138.3 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 96,000 shares.
iShares Semiconductor ETF (SOXX)
iShares Semiconductor ETF follows the ICE Semiconductor Index and offers exposure to U.S. companies that design, manufacture and distribute semiconductors. It holds 30 securities in its basket, with Intel occupying the fourth position at 6.2% of assets (read: Best & Worst ETF Areas of First Half 2023).
iShares Semiconductor ETF has amassed $8.6 billion in its asset base and trades in a volume of about 1.2 million shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook.
VanEck Vectors Semiconductor ETF (SMH)
VanEck Vectors Semiconductor ETF offers exposure to the companies involved in semiconductor production and equipment. SMH follows the MVIS US Listed Semiconductor 25 Index, which tracks the most liquid companies in the industry based on market capitalization and trading volume. VanEck Vectors Semiconductor ETF holds 26 stocks in its basket, with Intel occupying the sixth position at 4.5%.
VanEck Vectors Semiconductor ETF has managed assets worth $10 billion and charges 35 bps in annual fees and expenses. SMH is heavily traded with a volume of 7 million shares per day and has a Zacks ETF Rank #2 with a High risk outlook.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Intel Corporation (INTC) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
