Shares of Intel Corporation (NASDAQ: INTC) declined on Friday following the release of the company’s fourth-quarter financial results and the issuance of a subdued outlook for the first quarter of 2024. The chipmaker reported adjusted earnings per share (EPS) that outperformed analyst estimates for the fourth quarter, yet the cautious forecast for early 2024 weighed on investor sentiment.
Intel announced adjusted EPS of $0.15 for the fourth quarter, exceeding the consensus expectation of $0.08. The company also reported revenue of $13.67 billion, which was above the anticipated $13.37 billion. These results highlighted the company’s ability to deliver solid financial performance despite broad supply constraints impacting the semiconductor sector.
CEO Lip-Bu Tan remarked on progress towards executing strategic initiatives, notably mentioning the launch of products based on Intel's 18A process technology. CFO David Zinsner noted that while the company surpassed fourth-quarter expectations, supply chain limitations persist industry-wide. Nonetheless, fundamental demand in core markets remains robust according to management commentary.
Looking ahead, Intel provided first-quarter guidance that fell short of analyst consensus estimates. The company forecast revenue in the range of $11.70 billion to $12.70 billion, compared to the consensus figure of $12.49 billion. Adjusted EPS guidance was set at $0, below the expected $0.05. This tempered outlook triggered a negative reaction in the stock price, reflecting concerns about near-term growth momentum.
Following the earnings release, several analysts updated their evaluations on Intel's stock. Needham's N. Quinn Bolton reaffirmed a Hold rating without changing the price target. Benchmark’s Cody Acree maintained a Buy recommendation and increased the target price from $50 to $57, signaling confidence in longer-term fundamentals. Conversely, Rosenblatt’s Kevin Cassidy kept a Sell stance while raising the price target modestly from $25 to $30.
From a technical perspective, Intel's shares are positioned 9.3% above their 20-day simple moving average (SMA), and 28.4% above the 100-day SMA. These metrics suggest that despite the short-term retreat, the prevailing upward trend remains intact. Over the past twelve months, shares have surged by approximately 151.83%, reflecting strong performance in the stock.
Technical indicators paint a nuanced picture, with the relative strength index (RSI) registering at 76.74, placing the stock in overbought territory. Meanwhile, the moving average convergence divergence (MACD) remains above its signal line, indicating underlying bullish momentum. This combination suggests that although a corrective pullback is in progress, Intel retains positive directional strength.
Intel’s standing relative to the overall market was assessed through the Benzinga Edge scorecard. The company achieved a robust momentum score of 97.31, indicating outperformance against broader market averages. Its value score stood at 50.67, reflecting a fair valuation relative to peers, rather than suggesting a bargain opportunity.
By the time of this report, shares are trading down 16.15% at $45.55, signaling investor caution in response to the lowered prospects for the upcoming quarter. Despite this retreat, the compound performance since last year and key technical signals imply that the stock remains fundamentally strong.
Overall, Intel's recent financial results confirm its capability to navigate supply chain headwinds while maintaining fundamental demand in key sectors. However, given the underwhelming near-term guidance and the varied analyst responses, investors face uncertainties regarding short-term growth prospects. The stock exhibits strong momentum but is also deploying from overbought levels, signaling potential volatility ahead.