Investors holding on Intel Corporation stocks have all the reasons to celebrate as the company's share prices continue to surge. Intel stocks surged by as much 8 percent to $68.47 per share at the closing of last week's trading following the release of its latest full-year earnings results.
Friday's closing marked the company's best single-day percentage gain since January 2018. The surge was mainly boosted by the release of its better-than-expected full-year earnings, which itself was supported by Intel's strong cloud computing business.
Overall revenues were boosted by the company's strong client computing and data center business, which managed to offset the company's relatively weaker-performing non-volatile memory, IoT, and programmable solutions units.
In its latest earnings report for 2019, Intel managed to gain positive numbers across the board. The company's revenues for the year, which amounted to around $72 billion, were higher than the initial analyst's expectations by about $980 million. Analysts were also surprised by Intel's announcement of delivering a statutory profit of $4.71 per share. This was significantly higher than expected.
Intel's performance last year managed to result in massive updates to analysts forecasts for 2020. Taking into account the company's latest earnings report for last year, analysts have upgraded their revenue forecast to an average of $73.7 billion for this year. This reflects a reasonable 2.5 percent revenue growth increase and slightly higher than the forecasted $72.2 billion prior to the release of the latest earnings report.
Forecasted earnings per share for this year averages at around $4.74 per share, slightly higher than the $4.46 per share forecasted before Intel released its 2019 earnings report. While the upgrades may be incremental, they still represent a significant increase in confidence in the company's ability to generate profits this year.
As for its expected stock performance, analysts have also upgraded their price targets by around 15 percent to $66.59 per share. This figure is currently the average of analyst's price targets and investors are advised not to fixate on a single price target.
The most bullish price targets have pegged Intel shares to hit $90 per share, while the most pessimistic have it at around $45 per share. The massively wide gap is something that investors will have to consider as there is a fairly broad range of possible outcomes for the business given the 12 month period.
Analysts with forecasts near the pessimistic levels have cited potential headwinds in 2020 that could affect Intel's performance moving forward. Chief amongst the factors that could affect its business is the added pressure from more aggressive competitors such as AMD.
