Intel INTC is set to release second-quarter 2020 results on Jul 23 after market close. Being a market leader in e-commerce, it is worth taking a look at the company’s fundamentals ahead of its results.
Intel has gained 2.8% over the past three months, underperforming the industry’s average growth of 22.2%. It can see a strong run-up in its share price given that the world’s largest chipmaker has a higher chance of an earnings beat (read: Semiconductor ETFs Continue to Shine as Q2 Earnings Unfold).
Inside Our Methodology
Intel has a Zacks Rank #2 (Buy) and an Earnings ESP of +3.13%. According to our surprise prediction methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The stock saw positive earnings estimate revision of a penny over the past 30 days for the to-be-reported quarter. Analysts increasing estimates right before earnings — with the most up-to-date information possible — is a good indicator for the stock. The Zacks Consensus Estimate represents a substantial year-over-year increase of 12.3%. Additionally, Intel’s earnings surprise history is impressive, with surprise beat of 17.37%, on average, for the last four quarters. The company is expected to report revenue growth of 12.35%. The stock has a top VGM Score of A and falls under a top-ranked Zacks industry (top 21%).
The Zacks Consensus Estimate for average target price is $64.54 with nearly 36% of the analysts giving a Strong Buy or a Buy rating ahead of the company’s earnings (see: all the Technology ETFs here).
Intel Corporation Price, Consensus and EPS Surprise
Intel Corporation price-consensus-eps-surprise-chart | Intel Corporation Quote
What to Watch
Investors will closely monitor the data-center business, which is expected to continue to benefit from the pandemic due to rising demand for laptops and cloud-computing power to support remote working.
ETFs to Buy
Given this, ETFs with the highest allocation to this online behemoth will be in focus ahead of its earnings announcement. We have highlighted some of them in detail below:
VanEck Vectors Semiconductor ETF SMH
This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. Intel occupies the second position with 9.3% of the assets. The product has managed assets worth $2.7 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of more than 5 million shares per day and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Chip ETF Posts Best Q2: 5 Stocks That Led the Way).
iShares PHLX Semiconductor ETF SOXX
This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with INTC taking the fifth spot with 6.8% allocation. The fund has amassed $3.3 billion in its asset base and trades in volume of about 1.1 million shares a day. The product charges a fee of 46 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook.
First Trust Nasdaq Semiconductor ETF FTXL
This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 31 stocks in its basket, Intel is the fourth firm accounting for 7.2% share. FTXL has accumulated $44.3 million in AUM and trades in average daily volume of 16,000 shares. It charges 0.60% in expense ratio and has a Zacks ETF Rank #2.
Invesco Dynamic Semiconductors ETF PSI
This fund tracks the Dynamic Semiconductor Intellidex Index, holding 31 securities in the basket. Intel occupies the eight position and makes up for 4.3% share in the basket. PSI has lower AUM of $284.4 million and sees moderate average daily volume of about 40,000 shares. It charges 58 bps in annual fees and carries a Zacks ETF Rank #1 with a High risk outlook.
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