Citi Launches Positive Catalyst Watch On NXP, ON; Negative On Intel

Citi analyst Christopher Danely spent the last few weeks meeting with clients across the country and wanted to express his thoughts on sentiment and stocks.
He remained negative on semis but believed a short-term rally could continue through August, given near-term downside is understood. Investors were universally bearish on semis, but a large-scale collapse was not imminent.
He launched cheerful catalyst watches on NXP Semiconductors NV NXPI and ON Semiconductor Corp ON in anticipation of good earnings and a short-term bounce in the group and a negative catalyst watch on Intel Corp INTC due to downside to estimates for earnings.
Previously, Citi reiterated Neutral on Intel Corp INTC and Advanced Micro Devices, Inc AMD, betting on a contraction in the PC market to impact both negatively.
May marked the fifth consecutive month where notebook shipments were below expectations.
It cut the 2Q22E notebook shipments from down 3% Q/Q to down 11% Q/Q, well below seasonality of up 5%-10% Q/Q.
Intel reportedly looks to hike its processor prices after Taiwan Semiconductor Manufacturing Company Ltd TSM. It could force PC vendors to opt for advance purchases.
Rising production costs put pressure on chipmakers amid demand slowdown for smartphones and personal computers on market uncertainties fueled by inflation, the Ukraine crisis, and COVID-related lockdowns in China.
Photo by jonas-svidras via Unsplash

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