Intel Stock Should Get A Positive Update After Earnings

Benchmark Securities believes that Intel stock is a buy now that the worst has already been priced into it. 

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Cody Acree, an analyst with Acree Analysts, upgraded the semiconductor firm from a hold to a buy today, saying that investors should take a more "constructive" approach to the stock following better earnings than expected.

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As the first quarter of the year came to a close, Intel reported a positive top and bottom line. In addition to its largest quarterly loss in the company's history, it posted its fifth consecutive quarter of falling sales as well. It may mean the stock has reached its bottom for some investors, which could be a good sign for the stock. In Friday's premarket trading, the stock was up more than 5% over the previous day. There has been an increase of more than 12% in the last year alone.  

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 "With regards to Intel's results and outlook, Acree believes that given the current macro-economic environment, it would be prudent to begin taking a more positive stance with regards to Intel's shares in the near future," Acree wrote in a note sent to clients on Friday. 

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“In spite of the uncertainty surrounding the future of the sector's recovery, we do believe that Intel has reached a trough in terms of revenue, gross margin, and profits in the first half of the year and we anticipate that in the next few quarters the company will be able to deliver incrementally stronger results as its operations improve in efficiency," Acree concluded. 

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From Thursday's close, the analyst expects the stock to rise another 30% by the end of next year with a price target of $39 per share. 

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Aside from Benchmark, other Wall Street firms have also upgraded Intel's stock following the company's earnings report. As part of its upgrade, Wedbush also raised its price target on the chip stock from $20 to $30, while upgrading it from underperform to neutral. 

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Despite what Wedbush analyst Matt Bryson called a "mixed bag" of results from the company, he said that further negative surprises are not expected for the stock in the near future. 

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Bryson said in a note on Friday that he does not believe there will be a catalyst that could push revenue and earnings below recent results in the near future.

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“We no longer see a clear argument to maintain our UNDERPERFORM rating on Intel (creating both opportunity and risk depending on forward execution), as no significant negative catalyst is imminent in the near term, and we have little concrete insight (yet) into how Intel's manufacturing transitions will proceed (creating both opportunity and risk). Therefore, we are switching to a NEUTRAL rating. 

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