These Analysts Think Intel Corporation's (NASDAQ:INTC) Earnings Are Under Threat
Market forces rained on the parade of Intel Corporation (NASDAQ:INTC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, the current consensus, from the 30 analysts covering Intel, is for revenues of US$51b in 2023, which would reflect a considerable 19% reduction in Intel's sales over the past 12 months. After this downgrade, the company is anticipated to report a loss of US$0.68 in 2023, a sharp decline from a profit over the last year. Before this latest update, the analysts had been forecasting revenues of US$61b and earnings per share (EPS) of US$0.99 in 2023. There looks to have been a major change in sentiment regarding Intel's prospects, with a measurable cut to revenues and the analysts now forecasting a loss instead of a profit.
Check out our latest analysis for Intel
The consensus price target fell 5.9% to US$29.34, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Intel, with the most bullish analyst valuing it at US$67.10 and the most bearish at US$17.00 per share. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 19% by the end of 2023. This indicates a significant reduction from annual growth of 2.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Intel is expected to lag the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Intel dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Intel.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Intel analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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