Benchmark upgrades Intel, says investors should get constructive on chip stock after earnings

Published Fri, Apr 28 20238:29 AM EDT

Intel is a buy now that the worst is priced into the chip stock, Benchmark said. Analyst Cody Acree upgraded the semiconductor firm to buy from hold, saying that investors should get more "constructive" on the stock after its better-than-expected earnings results. Intel beat on the top and bottom lines in its first quarter. It also posted its largest-ever quarterly loss , as well as its fifth straight quarter of falling sales. For some investors, that could mean the stock may have found its bottom. The stock was up more than 5% in Friday premarket trading. It's up more than 12% this year. INTC 1D mountain Intel shares 1-day "[We] believe the company's results and outlook now reflect a worst case scenario considering the current macro-economic climate and accordingly we believe it is prudent to begin to take a more positive stance on Intel's shares," Acree said to clients in a Friday note. "While the future pace of the sector's recovery is uncertain, we do believe that Intel has reached a revenue, gross margin, and profit trough through this first half of '23 and that subsequent quarters will provide a more constructive backdrop for the improved efficiencies of its operations to deliver incrementally stronger results," Acree added. The analyst's $39 price target implies that the stock could rise another 30% over the next 12 months from Thursday's close. Benchmark wasn't the only Wall Street firm to upgrade Intel post earnings. Wedbush also upgraded the chip stock to neutral from underperform, and raised its price target to $30 from $20. Wedbush analyst Matt Bryson said the results were a "mixed bag," but he does not anticipate any more negative surprises for the stock. "Net, we no longer see a near-term catalyst that might push revenue and earnings below recent results," Bryson wrote Friday. "Without another significant negative near-term catalyst on the horizon, and given we have little concrete insight (yet) as to how Intel's manufacturing transitions will proceed (creating both opportunity and risk depending on forward execution), we no longer see a clear argument to maintain our UNDERPERFORM rating and we are shifting to a NEUTRAL view on the name," he added. —CNBC's Michael Bloom contributed to this report.