Equities trading – Intel Corporation (INTC)

Intel Corporation will announce fourth quarter earnings on Thursday (January 25th) after the market closes.

The consensus is for the company to report earnings per share of $0.86, versus $0.79 a year ago. The potential for a surprise on the upside must be considered after the Q3 EPS shaded $1.01, versus expectations for $0.8.

But Intel has been raising financial guidance off the back of that strong performance, which was driven by its Client Computing Group.

A key focus is the Spectre and Meltdown security flaws which together affect virtually every chip in existence. Spectre is industry-wide but Meltdown is focused on Intel. There are concerns about reputational damage but management has said that it anticipates no financial damage.

Shares in AMD rallied firmly as Intel’s sank on the news as it is seen as a competitive for AMD and ARM. There are also concerns that Intel is set to lose market share to rivals in the data centre market, which it currently dominates.

Therefore while it is expected that Intel can match estimates for earnings in the fourth quarter, investors will want to know if there is any change on guidance and whether there are any clouds on the horizon with respect to these security flaws and data centre market share losses.

Share price metrics

The stock has risen about 45% in the last 12 months but has been higher in the last year. It’s twice made a top above $47 but has failed to break the $48 mark at any stage. $48 will be the target for bulls with analysts’ 12-month consensus target at $49.5.

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