Why Analysts Are Chasing Intel and Qualcomm Higher

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Intel Corp. (NASDAQ: INTC) and Qualcomm Inc. (NASDAQ: QCOM), two of the largest chipmakers in the world, each saw mixed reactions to their respective earnings. As the tech sector drives the market, these are the key movers at the tip of the spear. Regardless of their performance on this earnings report, analysts piled into the stocks and were overall positive on both.

Here, 24/7 Wall St. included highlights from both earnings reports, as well as what analysts were saying about each stock after the fact.

Qualcomm reported third-quarter fiscal 2016 results after markets closed on Wednesday. The chipmaker posted adjusted diluted earnings per share (EPS) of $1.16 and revenues of $6 billion. In the second quarter of 2015, Qualcomm reported EPS of $0.99 on revenues of $5.8 billion. Thomson Reuters had estimates for $0.97 EPS and $5.58 billion in revenue.

In its outlook for its fiscal fourth quarter, Qualcomm guided revenues in a range of $5.4 billion to $6.2 billion, compared with $5.5 billion reported in the fourth quarter a year ago. Adjusted EPS is forecast in a range of $1.05 to $1.15, compared with an actual total of $0.91 last year. Analysts were expecting fourth-quarter EPS of $1.08 on revenues of $5.73 billion.

Several analysts weighed in on Qualcomm right after earnings were reported:

  • Bernstein raised its price target to $60 from $55.
  • BMO raised its price target to $53 from $50.
  • Canaccord Genuity raised its price target from $65 to $70.
  • Cowen raised its price target to $62 from $60.
  • Credit Suisse raised its price target to $70 from $67.
  • Exane BNP Paribas has a Neutral rating and raised its target to $54 from $52.
  • Goldman Sachs has a Buy rating and raised its target from $64 to $70.
  • JPMorgan raised its price target to $63 from $55.
  • Mizuho has a Neutral rating and raised its price target to $56.
  • Nomura raised its price target to $55 from $50.
  • Pacific Crest raised its price target to $67 from $59.
  • RBC raised its price target from $55 to $59.
  • Stifel raised its price target to $67 from $59.

Qualcomm shares were last seen up 8% at $60.28 on Thursday. The stock has a consensus analyst price target of $57.91 and a 52-week trading range of $42.24 to $64.95.

In its report, Intel said that it had $0.59 in EPS on $13.5 billion in revenue. Consensus estimates from Thomson Reuters had called for EPS of $0.53 and $13.54 billion in revenue. In the same period of last year, it posted $0.55 in EPS on revenue of $13.2 billion.

In terms of guidance for the third quarter, Intel expects to have a gross margin of 62% on revenues of $14.9 billion, versus consensus estimates of $0.64 in EPS on $14.63 billion in revenue.

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After Intel reported earnings, analysts responded as follows:

  • B. Riley has a Buy rating and raised its price target to $42.
  • Bernstein raised its price target to $31 from $30.
  • BMO also raised its price target to $31 from $30.
  • Brean Capital raised its price target from $36 to $38.
  • Goldman Sachs has a Neutral rating and raised its target to $34 from $33.
  • Jefferies raised its price target to $44 from $42.
  • JPMorgan raised its price target from $39 to $42.
  • Mizuho has a Buy rating and raised its price target to $38.
  • Pacific Crest raised its price target to $38 from $37.

Shares of Intel were down about 4.7% at $34.03. The consensus price target is $36.12, and the 52-week range is $24.87 to $35.93.