Benchmark analysts upgraded Intel (NASDAQ:INTC) to Buy from Hold, with a $39 price target in a note Friday that the worst is baked into the first half, and it is time to get more constructive.
Intel shares are up more than 6% premarket after it reported first-quarter earnings after the close Thursday, beating top and bottom-line consensus estimates.
"With Intel posting revenue and earnings upside for the March quarter and providing similar guidance for its June period, which accounts for continued inventory digestion in the PC and server markets and further expected share loss in the data center, we believe the company's results and outlook now reflect a worst case scenario considering the current macro-economic climate," the analysts wrote.
As a result, they now believe it is prudent to begin to take a more positive stance on Intel shares.
"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," the analysts added.