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On Friday, Cantor Fitzgerald reiterated a Neutral rating on Intel Corporation (NASDAQ:INTC) with a consistent price target of $22.00. According to InvestingPro analysis, Intel appears slightly undervalued at its current market cap of $86.3 billion. The firm’s analysis followed Intel’s recent earnings report, which presented mixed results. The company’s fourth-quarter earnings slightly exceeded expectations with revenue at $14.26 billion and earnings per share (EPS) of $0.13, compared to the consensus estimates of $13.8 billion and $0.12, respectively. However, the first-quarter guidance disappointed, projecting revenues of $12.2 billion and break-even EPS, which fell short of the anticipated $12.9 billion in revenue and $0.09 EPS.
Cantor Fitzgerald highlighted that all three of Intel’s product segments are expected to decline in the high-single to low-double digits due to macroeconomic uncertainty, including tariffs, and increasing competition in the market. InvestingPro data reveals concerning metrics, with revenue declining by 2.08% over the last twelve months and a negative return on invested capital of -3%. Get access to 8 more exclusive ProTips and comprehensive financial analysis with InvestingPro. Despite these challenges, there is an expectation that revenue, gross margins, and presumably EPS will reach their lowest point in the first quarter. Management at Intel has guided for incremental gross margins of 40-60% and reiterated an operating expense guidance of $17.5 billion.
Looking ahead, Cantor Fitzgerald has adjusted its model for Intel’s calendar year 2025 EPS to $0.25, which is a reduction from the prior estimate of $0.90 and below the consensus of $0.89. This aligns with InvestingPro’s analysis, which indicates negative free cash flow of -$15 billion and a concerning Altman Z-Score of 1.39, suggesting potential financial distress. Discover Intel’s complete financial health score and detailed Pro Research Report, available exclusively to InvestingPro subscribers. The firm also noted Intel’s focused efforts on returning to positive free cash flow. This includes reducing capital expenditures to the lower end of the $20 billion guidance, down from the previously guided range of $20-23 billion. Additionally, Intel plans to deleverage and pursue asset sales in 2025, with potential divestitures including its Altera, Mobileye, and other businesses.
In other recent news, Intel Corporation’s fourth-quarter earnings and revenue exceeded expectations, with $14.3 billion in revenue and Non-GAAP earnings per share (EPS) of $0.13. However, the company’s first-quarter guidance for 2025 fell short, projecting revenues of $12.2 billion and a Non-GAAP EPS of $0.00. Notably, Goldman Sachs, Rosenblatt Securities, and BofA have adjusted their price targets for Intel, reflecting mixed outlooks.
Intel has also announced the delay of its Clearwater Forest server CPU, the cancellation of its Falcon Shores GPU, and plans to introduce Granite Rapids and Diamond Rapids server technologies. In addition, the company announced collaborations with United Microelectronics Corporation and the construction of a new manufacturing complex in Ohio. These recent developments could impact Intel’s strategic direction and operational efficiency.
Intel’s management acknowledged ongoing challenges, with analysts from firms such as Needham and Bernstein maintaining their ratings and expressing caution regarding Intel’s performance and outlook. The company’s current revenue stands at $53.1 billion, with a gross profit margin of 32.7%, and projections imply a challenging road ahead. Despite these developments, Intel remains committed to improving its market position and enhancing its product offerings in the coming years.
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