In recent weeks, Bitcoin.com News has chronicled the significant number of dormant bitcoin addresses that have sprung to life in March after years, if not a decade, of inactivity. Similarly, we’ve observed a resurgence of activity from older ethereum addresses. This Saturday highlighted a noteworthy event: an individual who took part in the Ethereum initial […]
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It seems like everyone and their uncle hate Intel (NASDAQ:INTC) today. This is a sign of how fickle the market can be, but I encourage you to look at the big picture and make your own decisions. When the dust settles in a while, I expect the market to appreciate Intel again, and for the long term, I am bullish on INTC stock.
Intel is a chipmaker that, unlike some of the company’s competitors, actually manufactures its own microchips. Having a foundry business is risky, no doubt, but it’s what sets Intel apart.
Today’s INTC stock dumpage is a textbook example of how investor sentiment can turn on a dime. In just a year’s time, Intel has gone from doghouse to darling and back. Don’t be frustrated at the market’s wild mood swings, though, since irrational behavior leads to volatility, and volatility leads to opportunity.
INTC stock is down 12% today, even though there are multiple positive news items to report. In effect, the market is so hyper-focused on Intel’s quarterly report and forward guidance that it’s completely overlooking some important developments concerning Intel.
First of all, Intel just celebrated the opening of the company’s factory in Rio Rancho, New Mexico. According to Keyvan Esfarjani, Intel executive vice president and chief global operations officer, this represents the “opening of Intel’s first high-volume semiconductor operations and the only U.S. factory producing the world’s most advanced packaging solutions at scale.”
Furthermore, Intel announced a collaboration with Taiwan-based United Microelectronics Corporation (NYSE:UMC) to develop a “12-nanometer semiconductor process platform to address high-growth markets such as mobile, communication infrastructure and networking.” It’s interesting that Intel is partnering with a Taiwanese foundry business like United Microelectronics Corporation.
With this Taiwan-based partnership, could Intel and UMC be poised to steal significant market share from Taiwan Semiconductor (NYSE:TSM)? It’s a question that ought to be considered, but hardly anyone’s thinking about it today.
To be blunt, the market is so spoiled that it won’t tolerate anything but a full-on beat-and-raise anymore. Sometimes, there’s a beat-and-raise, but the earnings beat and/or the guidance raise isn’t high enough to impress investors. It’s a strange phenomenon – but again, irrationality leads to opportunity.
With its results for the fourth quarter of Fiscal Year 2023, Intel definitely achieved the “beat” part of the beat-and-raise formula. Intel CEO Pat Gelsinger had every right to boast, saying, “We delivered strong Q4 results, surpassing expectations for the fourth consecutive quarter with revenue at the higher end of our guidance.”
Here’s the rundown. Intel’s quarterly revenue grew by 10% year-over-year to $15.4 billion, beating analysts’ consensus expectations by $230 million. Moreover, Wall Street called for Intel to post Fiscal Q4-2023 earnings of $0.45 per share, but the company actually earned $0.54 per share.
After INTC doubled from $24 and change to $50, you might assume that Intel’s Street-beating quarterly results would send the share price higher. Yet, Intel didn’t deliver the “raise” part of the beat-and-raise combo that people expect nowadays.
Specifically, Intel provided a current-quarter revenue guidance range of $12.2 billion to $13.2 billion, while analysts’ consensus forecast called for $14.2 billion in revenue. In addition, whereas Wall Street forecast adjusted Fiscal Q1-2024 earnings of $0.32 per share, Intel’s management only guided for $0.13 per share.
In light of this, a number of analysts have turned cautious on INTC stock. Two examples are Bernstein’s Stacy Rasgon and Stifel Nicolaus’s Ruben Roy, who recently published Hold/Neutral ratings on Intel shares. Furthermore, Rasgon’s $42 price target and Roy’s $45 price target aren’t particularly optimistic.
Think about it – Intel stock would have to go practically nowhere for the next 12 months in order to land at those price targets. Yet, the company’s results demonstrate that Intel is capable of surpassing Wall Street’s financial estimates. Now that the current-quarter expectations are quite low, don’t be too surprised if there’s another earnings beat coming — though I can’t guarantee a beat-and-raise, which everybody seems to demand now.
On TipRanks, INTC comes in as a Hold based on seven Buys, 24 Holds, and four Sell ratings assigned by analysts in the past three months. The average Intel stock price target is $46.38, implying 6.5% upside potential.
Intel set the bar low for the current quarter. Investors reacted badly to this, but that’s how opportunities arise. All of this could just be a setup for another earnings beat and more optimistic guidance in a few months.
It’s difficult to envision a good outcome when the market’s sentiment is so negative about Intel. Bear in mind, though, that investors favored Intel just a few days ago. They’ll come to appreciate Intel again, I predict, so I feel that it’s smart to consider INTC stock while it’s trading at a reduced price.
FOMO in the stock market is back.
A lightning-fast rebound has driven the S&P 500 up in nine of the past 10 sessions and 7.2% over the past two weeks, the best such stretch of the year. Now, many investors are betting the rally has legs.
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Jimmy Choo. Versace. Michael Kors. Kate Spade.
These distinct designer brands all have something in common: a single parent company named Tapestry, Inc. That parent company has been getting bigger and bigger throughout 2023.
Rising rates, sticky inflation and the prospect of slowing consumer spending have sparked a flurry of deals in the fashion industry as companies look to mergers and acquisitions for growth.
“Growth-oriented acquisitions really help to drive the business further, ” said Dana Telsey, CEO of Telsey Advisory Group. “New designers can create interest because you can extend your customer base, whether it’s extending your customer base older or younger, or extend your customer base globally.”
The trend of fashion consolidation among U.S.-based brands is mirroring the pattern of LVMH in Europe, a mega fashion brand that has aggressively expanded via acquisitions. Despite all this consolidation, the consumer experience remains fairly unchanged, as businesses lean into each brand’s unique identity.
The popularity of online shopping has also provoked retailers to pursue mergers that promote expansion online and in stores. As social media creates new avenues for promotion, brands grappling with the high cost of celebrity endorsements are looking to expand their resources through mergers and acquisitions.
Watch the video above to learn more about the trends fueling fashion’s merger mania.
(Bloomberg) — A $2.6 billion deal announced last week has set the stage for a potentially landmark shift in the metal and mining investment landscape: the arrival of Saudi Arabia as a pivotal player.
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The agreement with Vale SA gives the kingdom a 10% slice in one of the world’s crucial suppliers of nickel and copper — essential metals needed to decarbonize. It’s also held other talks, including with Barrick Gold Corp. about investing in a big Pakistan copper mine, according to people familiar with the matter. Speaking privately, executives at top miners said the value of Thursday’s deal made clear that the Saudis are ready to splash cash around.
Read more: Saudi Arabia Ramps Up Mining Foray in $2.6 Billion Brazil Deal
The move comes as the question of who controls the commodities needed to both sustain and decarbonize the world’s economies has turned into a global flashpoint, jumping to the top of agendas in the US and Europe.
China has for years been the dominant buyer and a key source of funding, as it sought to secure supply for its rapid industrialization. But as tensions with the West have mounted, the mining industry is now facing increased pressure to look elsewhere.
Saudi Arabia is seeking to take minority stakes in global mining assets that will over time help provide access to supplies of strategic minerals. The country also is looking to build a metals-processing industry that could in turn make it more attractive for international miners to exploit its mineral deposits — a central pillar of Saudi efforts to diversify the economy away from oil.
Read: Saudi Arabia Eyes $3.2 Billion of Global Mining Investments
The kingdom has invested heavily into industrial and financial assets and even turned the world of sport upside down by essentially buying the game of professional golf and piling into soccer. However, the Vale deal announced last week is its first major foray into mining. Manara Minerals, a new venture between the kingdom’s sovereign wealth fund and state mining company, will get a stake in Vale’s base metals business, giving Saudi Arabia an interest in mines from Indonesia to Canada producing copper, nickel and other industrial metals.
For western producers, the kingdom offers access to deep pools of capital, which are appealing as Chinese funds become less politically palatable, but also as some institutional investors have turned less comfortable with mining over environmental concerns.
Investors from the region — Qatar is already a major backer of Glencore Plc — are now likely to become one of the most important financiers for the capital hungry sector, according to serial mine builder Robert Friedland, who spent the last few years developing one of the world’s biggest copper operations, in the Democratic Republic of Congo, with the help of Chinese funds.
“Now, probably, the largest supply of capital to the mining industry will come from the Middle East,” he said in an interview last month.
But Saudi Arabia offers something else beyond cold cash: political backing for companies looking to expand into the Muslim world as deposits in more traditional jurisdictions are depleted.
Canada’s Barrick has been in talks with the Public Investment Fund about a potential stake in its Reko Diq copper project in Pakistan, which is a relatively untouched frontier for the international mining industry, according to people familiar with the matter. Bringing the Saudis on board would not only ease Barrick’s funding burden, but also introduce a partner that has significant political influence in Pakistan, the people said.
Spokespeople for the PIF and Barrick did not comment.
Saudi Arabia’s deep pockets may also present some challenges for the biggest producers who are looking for deals of their own. Keen to get more exposure to copper and nickel, miners have started writing the biggest checks in more than a decade. BHP Group and Rio Tinto Group — the two largest — have just completed multi-billion dollar deals to grow in copper, while Glencore Plc tried to buy Teck Resources Ltd.
For years, the big producers have found themselves repeatedly outbid by Chinese companies when it comes to buying mines. China’s state-owned metal and mining companies have been willing to pay valuations that western firms simply couldn’t match. Saudi Arabia now seems willing to do the same, potentially putting some deals beyond the reach of the industry’s traditional buyers.
Executives at two of the biggest mining companies, which have spent years assessing base metal assets such as those owned by Vale, said privately that they were surprised by the price tag in last week’s deal, which valued the unit at $26 billion (RBC Capital Markets said it was worth about $21 billion, while BMO Capital Markets said it was higher than market expectations.)
Still, unlike Chinese companies, Saudi Arabia is currently more interested in securing stakes — guaranteeing future supply of critical minerals — rather than buying outright and then operating the assets.
Saudi Arabia set down a marker earlier this year when it announced the new firm to invest in mining assets globally, with $3.2 billion for initial investments. The country holds an annual mining conference, which this year featured the chief executive officer of the world’s biggest mining company, BHP’s Mike Henry, as well as the chairman of No. 2 producer Rio Tinto — a major step up from past speakers. CEOs from other top miners are expected to attend next year.
For mining companies looking for funds, the US and Canadian governments’ recent crackdown on Chinese investment in key metals companies has changed the landscape. That’s given an opening to Middle Eastern countries like Saudi Arabia to fill the gap.
“Everything’s changed,” said Friedland.
“The American government has an ‘ABC’ policy: Anything But China. So the American government instead goes to rulers in the Middle East and says, “You should be giving the African people an alternative for financing mines in Africa. Recycle some of those petro-dollars.”
–With assistance from Mariana Durao, Dinesh Nair, Archie Hunter and Matthew Martin.
(Updates with analyst valuation in 15th paragraph)
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