Intel (NASDAQ: INTC) reported better-than-anticipated Q3 2024 results on October 31, marking progress on its aggressive restructuring and cost-cutting initiatives.

The company’s non-GAAP EPS was a loss of $0.46 per share, missing estimates by $0.43, while revenue came in at $13.28 billion, beating expectations by $240 million but still reflecting a 6.2% decline year-over-year.

Key segments performed variably: the Client Computing Group (CCG) brought in $7.3 billion, below the $7.46 billion analysts had expected, while the Data Center and AI (DCAI) segment saw a modest 9% increase to $3.35 billion.

Meanwhile, Intel’s foundry services reported $4.4 billion, a decrease of 8%, reflecting challenges in competing with established industry leaders like TSMC.

 Intel also raised Q4 guidance with projected revenue between $13.3 and $14.3 billion, and gross margins expected to rise to approximately 39.5% on an adjusted basis.

Analyst reactions remain cautious

Several analysts acknowledged Intel’s positive third-quarter performance but maintained a cautious outlook.

Deutsche Bank, for example, reiterated its Hold rating with a price target of $25, citing Intel’s improved stability yet noting that meaningful financial gains from its turnaround likely remain distant.

Barclays also maintained an Equalweight rating and a $25 price target, expressing reservations about Intel’s competitive positioning despite modest progress in its data center segment.

Although Intel’s Q3 results brought a stock price boost, analysts largely see the company’s transformation as a prolonged effort, with substantial progress not expected until at least 2025.

Operational shifts and cost-cutting measures

Intel continues to address its operational inefficiencies through workforce reductions and strategic realignments, laying off thousands to align its cost structure with long-term growth plans.

The company reported a $2.8 billion restructuring charge in Q3, which included $528 million in non-cash impairments and future cash settlements.

Intel has committed to a $10 billion cost reduction plan by 2025, positioning itself for increased profitability as it reorganizes its business.

However, these cost-saving measures come amid a highly competitive environment, with Nvidia and AMD rapidly capturing market share, particularly in data center and AI applications.

Financial stability and long-term outlook

While Intel’s results indicate steps toward stability, its financial situation remains mixed.

The company ended Q3 with nearly $50 billion in debt, partly offset by $24 billion in cash and short-term investments.

Despite a $3 billion boost from the U.S. government’s Secure Enclave Partnership, Intel’s Q3 free cash flow was down $2.7 billion, underscoring ongoing liquidity challenges.

Intel plans to invest between $12 billion and $14 billion in capital expenditures for FY2025, primarily to advance its 18A node technology, a critical component of its foundry strategy.

The market’s optimistic reaction to Intel’s restructuring could be tied more to these future growth prospects than to current performance.

Product and market performance remain mixed

Intel’s core product lines showed mixed performance in Q3, with certain segments, such as data centers, seeing modest growth.

However, Intel’s foundry business, a strategic area intended to compete with TSMC, reported an 8% revenue drop, with substantial operating losses continuing.

Intel’s renewed foundry focus, including plans to onboard additional 18A technology customers, is crucial for future growth.

The company expects continued progress in its product roadmap, particularly with upcoming releases like Panther Lake and Clearwater Forest chips, which are expected to attract new design wins from third-party customers.

Valuation Stands High Relative to Sector

Intel trades at multiples that are comparatively high within the semiconductor sector.

Despite a trailing twelve-month price-to-earnings (P/E) ratio around 3x that of its sector, the stock’s price continues to climb, driven partly by optimism about the restructuring’s long-term impact.

However, Intel’s trailing twelve-month free cash flow margin remains negative, and with earnings metrics pressured by restructuring costs, its current valuation reflects a mix of potential and persistent financial strain.

The company’s profitability grade in sector-relative rankings remains low, further emphasizing the valuation disconnect with its ongoing losses and restructuring requirements.

As we look forward, Intel’s stock performance will likely hinge on its ability to capture new customers in its foundry services and deliver on its 18A technology promises.

Investors tracking Intel’s progress will find it valuable to observe price movements and trading volumes closely as we delve into the technical indicators that offer further insights into where Intel’s stock trajectory might be heading.

Weakness persists, but bulls still have a glimmer of hope

Despite today’s bump in stock price, Intel’s stock is still trading down 55% year-to-date and has lost almost 60% of its value in the last 5 years. The stock especially became weak this year when it fell from above $30 to below $20 after the company announced its Q2 numbers.

Source: TradingView

Though the stock remains extremely weak in long-term charts, investors who are willing to bet on the company to make a turnaround and for the stock to bounce significantly from here can initiate a small long position near current levels at $22.7.

However, they must keep a strict stop loss at its recent swing low at $18.5 and must only add on to their long positions if the stock breaks above its bearish trendline as characterized in the chart by the red line.

Traders who have a bearish outlook on the stock must refrain from shorting it at current levels as the stock has already fallen significantly this year.

A short position must only be considered once the stock approaches its 100-day moving average.

The post Is Intel’s downtrend finally over? Stock signals a rebound appeared first on Invezz

Abercrombie & Fitch (ANF) stock suffered a harsh reversal this year, erasing some of the gains made last year, when it was one of the best-performing companies in Wall Street. It has retreated to $130, its lowest point since Oct. 3, and 33% below its highest level this year.

Growth concerns remain

Abercrombie & Fitch, the parent company of it eponymous brand, Hollister, and Gilly Hicks, has gone through a difficult year as it failed to replicate its success in 2023.

It is not alone as other apparel companies have struggled. Lululemon, the biggest athleisure brand, has dropped by over 37% from its highest level this year.

Similarly, Gap stock remains in a deep correction after falling by 30% from the year-to-date high. Other firms like American Eagle, American Outfitters, and Boot Barn have all pulled back, a sign that the weak consumer spending is to blame.

Abercrombie & Fitch’s business has done well in the past few years as its revenue growth has recovered modestly. This happened as the management accelerated its product launches while attracting many of the young shoppers. 

ANF’s annual revenue has rebounded from $3.2 billion in 2020 to $4.2 billion las year, a trend that has continued this year. 

The most recent results showed that its second-quarter revenue rose by 21% to $1.1 billion, while its comparable sales growth rose to 18%. This revenue growth happened across all its regions and brands.

Abercrombie also boosted its margins by 590 basis points to 15.5%, pushing its operating income to $176 million. 

The management expects that its annual revenue growth will be between 12% and 13% and its operating margin will be between 14% and 15%. 

Read more: Abercrombie & Fitch stock: the moment of clarity nears

ANF earnings ahead

The next important catalyst for the Abercrombie & Fitch stock will be its third-quarter earnings that will come out on Nov. 29.

These results will provide more color on its performance, and whether the business is still firing on all cylinders. 

Analysts are optimistic that its business trajectory was in the right direction in the last quarter, with the average revenue estimate being $1.18 billion. The firm will likely report stronger numbers since it has beaten the consensus in the past few consecutive quarters. As such, I suspect that the revenue will be about $1.19 billion.

External data shows that its e-commerce platforms continued to see modest traffic, which may translate into sales. In September, its main website had 17 million visitors, while Hollister had 14 million.

The revenue guidance for the fourth quarter will be $1.51 billion. That will bring the annual revenue to $4.85 billion, a 13.3% increase from last year. Its 2025 revenue is expected to slow to 5.2% to $5.1 billion. 

Abercrombie & Fitch has also been a highly profitable company, with the expected earnings per share expected to be $2.37, higher than the $1.83 it made in the same quarter last year. 

The annual EPS is expected to jump sharply from $6.28 in 2023 to $10.36 this year. This is a strong performance for a company that struggled to attain profitability a few years ago.

ANF also has a strong balance sheet. It ended last quarter with over $738 million in cash and short-term investment and no debt. Its biggest part of its liabilities is its capital leases, which stood at $688 million. It ended the last quarter with total liquidity of $1.2 billion.

Abercrombie is still a fairly undervalued company since it has a forward price-to-earnings ratio of 12.8, much lower than the S&P 500 average of 21. It is also cheaper than some other apparel companies like Boot and Aritzia. 

Read more: Abercrombie & Fitch (ANF): insiders are selling the stock

Abercrombie & Fitch stock analysis

ANF chart by TradingView

The daily chart shows that the ANF share price peaked at $143.42 earlier this year and then moved into a deep correction as it fell to $127. It has found a strong support at this level since it has failed to move below it several times since August 2nd.

Abercrombie & Fitch has moved below the 50-day and 100-day Exponential Moving Averages (EMA). It is also approaching the 38.2% Fibonacci Retracement point.

Also, the MACD and the Relative Strength Index (RSI) have all pointed downwards. It has also formed a descending triangle pattern, a popular bearish sign.

Therefore, while the ANF stock is cheap, there is a likelihood that it will have a bearish breakout, with the next point to watch being at the 50% retracement point at $105, which is about 20% below the current level. This view will be confirmed if the price moves below the lower side of the triangle at $127. 

On the flip side, a rebound above the 50-day moving average at $143 will point to more gains, potentially to $167, its highest level on Oct. 17.

The post Abercrombie & Fitch stock sits at a key support: wait before buying appeared first on Invezz

During India’s annual Diwali ‘muhurat’ trading, the NSE Nifty 50 and BSE Sensex indices showed a notable uplift, rallying on the back of renewed investor confidence and festive optimism.

Both indices bounced back after two days of losses, with Nifty 50 rising by 0.41% and Sensex by 0.42%, showcasing positive investor sentiment as the holiday period fuelled a surge in demand.

All 13 major sectors marked gains, and auto stocks led the rally, with Mahindra & Mahindra notably jumping by 3.27%, reflecting its 25% sales increase in October.

Festive demand drives Nifty 50 and Sensex gains by over 0.4%

The festive boost was evident across all sectors, with mid-cap and small-cap indices rising by nearly 0.7% and 1% respectively.

The gains were largely propelled by the auto sector, as manufacturers reported heightened sales linked to Diwali demand.

Despite recent underperformance in October, which was the toughest month for these indices since March 2020, the Diwali trading session highlighted resilience within the Indian stock market.

Companies like NCC saw a rise of 4.6% following lucrative contract wins, while certain sectors like healthcare saw mixed responses, with Narayana Hrudayalaya dropping by 2%.

This year’s Diwali trading session offered a welcome break from an otherwise challenging October.

With foreign investors pulling out amid subdued earnings, Indian benchmarks experienced significant losses, underscoring the market’s sensitivity to both local and global factors.

While Diwali optimism provided a brief respite, analysts caution that sustaining this momentum will depend on various factors, including corporate earnings and the return of foreign investment.

What’s next for India’s stock market?

While the Diwali rally brought cheer to investors, the Indian stock market remains at the mercy of both domestic and international pressures.

Upcoming indicators like US non-farm payroll data, as well as the US presidential elections, will likely influence investor sentiment in the coming weeks.

On the home front, corporate earnings and foreign investment inflows will play a critical role in maintaining upward momentum post-Diwali.

The auto sector emerged as the top performer during the Diwali trading session, with Mahindra & Mahindra leading the way.

Analysts note that sustained growth in this sector will require continued demand, which could face headwinds if global economic pressures persist.

The festive demand boost reflects positive sentiment, but with foreign investment flows showing caution, the market’s near-term path remains uncertain.

Mid-cap and small-cap stocks also saw a strong boost, with many investors optimistic about long-term growth prospects, supported by favourable domestic policies.

The post Indian shares rally as Nifty and Sensex rebound in Diwali Muhurat trading appeared first on Invezz

Block (SQ) stock price has crawled back after bottoming at $54 in August. It has entered a local bull market, rising by 30% from its lowest point in August, and is hovering near its highest level since May 6.

One of the top fintech brands

Block, formerly known as Square, is one of the top fintech companies in the world with a market cap of over $44 billion. This valuation is still significantly lower than its all-time high of $123 billion.

The company is now working to go back to its former glory, through its several brands like Square, AfterPay, Cash App, TIDAL, and TBD.

The challenge, however, is that each of these businesses is facing substantial competition. Square’s payment solution is competing with the likes of Stripe and PayPal, while TIDAL, a music streaming application, has a tiny market share of 0.11%. TIDAL competes with other juggernauts like Spotify, YouTube Music, and Apple Music.

AfterPay, the Buy Now Pay Later (BNPL) company it acquired for $29 billion in 2021, competes with the likes of Affirm and Klarna. Cash App is also seeing strong competition from companies like Venmo and Zelle. 

Block is doing well despite this rising competition. Its annual revenue has risen from $1.53 billion in 2019 to over $6.2 billion in 2023. Its trailing twelve-month (TTM) revenue stood at a record high of $8.4 billion.

The most recent results showed that its revenue grew from $5.5 billion in the second quarter of 2023 to $6.15 billion. This growth was mostly driven by transactions, which rose to $1.7 billion.

Subscriptions rose to $1.78 billion, while its Bitcoin revenue jumped to $2.6 billion as prices and volume rose. Block is the seventh-biggest holder of Bitcoin in the world, with 8,211 coins worth $573 million in its balance sheet. 

Block has also become a profitable company. Its second-quarter profit rose to $195 million, a big improvement from the $102 million loss it made in the same period last year. It also made a profit of $667 million in the first half of the year.

The results showed that Square’s gross profits rose to $923 million, while Cash App generated $1.29 billion.

Read more: PayPal stock analysis: the train already left the station

Third-quarter earnings ahead

The next important catalyst that will impact Block’s stock will be its third-quarter earnings scheduled for November 7. These results will provide more color on its performance as retail spending remained strong.

The numbers will also provide more hints about its recent partnerships. For example, it recently entered a partnership with SalonCentric, the biggest beauty product business-to-business company in the US. The deal introduced solutions like SalonInteractive, Vish, Submatic, and Pomp into Square’s app marketplace.

The biggest partnership that Block made was with Lyft, the second-biggest ride-hailing company in the US. This deal means that users are now able to pay for their trips using Cash App.

The average revenue estimate for the third quarter was $6.24 billion, a big increase from the $5.2 billion in the same period last year. 

Block is also expected to be a more profitable company, with the earnings per share (EPS) expected to grow from $0.55 to $0.87. 

The company’s forward guidance is expected to show that revenue will move to $6.35 billion. For the year, analysts expect its revenue to come in at $24.7 billion, followed by $27.4 billion in the next financial year. 

Read more: What’s going on with Block’s share price after Q4 profits beat expectations?

Is Block a good buy?

Block is one of the top fintech brands in the financial services industry. It owns some of the best brands, and is also one of the biggest players in the crypto industry. 

Most importantly, the management is now working on how to scale its business profitably. For a long time, it has had weaker margins than other companies like PayPal and Adyen. 

It has a 35% gross margin, while the other two have 45% and 62%. Their net profit margin are 2.90%, 14%, and 45%, respectively.

In my view, one easy way to boost its margins is to sell TIDAL, a company that will struggle to become profitable because of the rising competition.

Block stock price analysis

SQ chart by TradingView

The daily chart shows that the SQ share price has moved sideways in the past few months. It has moved slightly above the 50-day moving average. Most importantly, it has formed an inverse head and shoulders pattern, a popular bullish sign in the market.

Block has also remained slightly below the 23.6% Fibonacci Retracement level. Therefore, the stock will likely have a bullish breakout after publishing its financial results. If this happens, the next point to watch will be at $86.63, its highest level on March 12. This target implies a 20% comeback from the current level.

The post Here’s why Block (SQ) stock could rise 20% after earnings appeared first on Invezz