CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We up our 12-month target to $50 from $39, on P/E of 18.6x our ’25 EPS view, near peers/above historical. We keep our ’24 EPS at $1.94 and boost ’25 to $2.69 from $2.41. Ahead of Q4 results set for after the close, we see EPS of $0.45 at $15.2B in revenue and a 46.5% gross margin. We look for indications that PC vendors still possess healthy inventories after a seasonal strong H2 last year along with improving landscape for ’24 data center server builds. Mobileye is a minor headwind. Commentary on the gross margin trajectory in ’24 will be critical (we see 47%) as well as capital spending plans (seen at $22B; capital intensity of 36%) that likely imply another year of negative FCF (cost cuts a tailwind though). Most important will be indication of positive momentum of new foundry customers (foundry to be a separate P&L reportable segment starting Q1) and manufacturing execution (five nodes in four years). Still, we note wallet share loss and competitive pressures in core businesses (e.g., Arm-based servers).