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On Monday, Cantor Fitzgerald analysts adjusted their outlook on Intel Corporation (NASDAQ:INTC) shares, reducing the price target to $20 from the previous $29, while maintaining a Neutral rating on the stock. With Intel currently trading at $18.93 and a market capitalization of $82.5 billion, the company is preparing for its upcoming earnings call on April 24 under the leadership of new CEO Lip-Bu Tan. According to InvestingPro data, the stock has struggled recently, with a -44% return over the past year.
The analysts anticipate that Intel may deliver earnings that align with current expectations, but could potentially forecast weaker performance in the upcoming guidance. The rationale behind this expectation is the company’s opportunity to recalibrate its financial projections with the recent appointment of Tan amidst volatile market conditions and economic challenges. InvestingPro analysis indicates Intel’s overall financial health score is currently WEAK, with the company not profitable over the last twelve months, though analysts predict a return to profitability this year.
The firm acknowledged the ongoing transition period for Intel as it seeks to establish a clearer strategic direction. The analysts expect additional cost-cutting measures and a more urgent approach to be implemented over the next quarter. They also noted that due to today’s geopolitical uncertainties, detailed guidance for calendar year 2025 is unlikely to be provided.
Looking ahead, Cantor Fitzgerald highlighted several potential catalysts for Intel, including further reductions in force (RIFs), the Intel Foundry Day on April 29th featuring a keynote from CEO Lip-Bu Tan, and any announcements regarding joint venture partnerships with potential customers.
The analysts provided a sum-of-the-parts (SOTP) valuation that suggests a fair value of $26 for Intel shares. This valuation is based on twice the core ProductCo revenues, plus $29 billion for investments and $15 billion for FoundryCo. The previous price target of $29 accounted for a higher valuation for ALTR, a higher share price for MBLY than currently observed, and $25 billion for FoundryCo. Despite the reduced price target and the challenges ahead, Cantor Fitzgerald believes the risk/reward profile for Intel remains tilted to the upside. However, they reiterated their Neutral rating due to the significant efforts required by the company during this period of transition.
In other recent news, Intel Corporation has made significant moves with the announcement of its agreement to sell a 51% stake in its subsidiary, Altera, to private equity firm Silver Lake. The deal values Altera at approximately $8.75 billion, considerably less than the $16.7 billion Intel originally paid in 2015. This transaction aligns with CEO Lip-Bu Tan’s strategy to focus on Intel’s core x86 business and is expected to enhance operational efficiency. Analysts from firms such as Raymond (NSE:RYMD) James and BofA Securities have maintained their neutral ratings on Intel, noting that the sale could dilute Intel’s long-term earnings per share due to Altera’s high-margin profile.
In related developments, Susquehanna has raised its price target for Intel to $24, citing a more optimistic view on notebook builds and potential margin improvements from upcoming product launches. Despite this, they have maintained a neutral stance on the stock. The recent launch of Intel’s Lunar Lake and Arrow Lake chips has shown slower market adoption, which could benefit Intel’s gross margins. Meanwhile, Intel’s Foundry business is reportedly seeing increased customer interest in its 18A process. The transaction with Silver Lake is part of a broader strategy under the new CEO to realign Intel’s focus and improve financial flexibility.
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