Cantor Fitzgerald raises Intel stock price target to $29

On Tuesday, Cantor Fitzgerald adjusted its outlook on Intel Corporation (NASDAQ:INTC) by increasing the chipmaker’s price target from $22.00 to $29.00, placing it within the broader analyst range of $17.70 to $31.00. The firm maintained a Neutral rating on the stock. According to InvestingPro data, Intel, with its substantial $102.19B market cap, is currently trading near its Fair Value. The move reflects Cantor Fitzgerald’s view on the ongoing strategic changes within Intel, particularly regarding the potential split of Intel’s design and foundry businesses.

Analysts at Cantor Fitzgerald believe that Intel’s situation is complex, but they see validity in recent news reports suggesting that a division of Intel’s DesignCo and Intel Foundry Services (IFS) is likely. They noted that the restructuring process appears to be in its early stages, with the new administration at Intel pushing forward with the plans. The firm also anticipates that Taiwan Semiconductor Manufacturing Company (TSMC) will agree to be involved in managing IFS, under conditions that would be favorable to them.

Cantor Fitzgerald expressed concerns about Intel’s current leadership vacuum and financial health, drawing parallels with past issues faced by General Motors (NYSE:GM). The lack of a new CEO and negative free cash flow (FCF) at Intel are seen as significant challenges by the firm. InvestingPro data reveals the severity of these challenges, with the company burning through cash and reporting negative free cash flow of $15.66 billion in the last twelve months. Get access to 8 more crucial InvestingPro Tips and comprehensive financial analysis with a subscription. They believe that these factors contribute to a higher probability of Intel Design-Co and IFS being separated.

The key question, according to Cantor Fitzgerald, revolves around who will manage IFS post-separation. They suggest that TSMC would be the most logical choice to take on this role, given the circumstances.

The increased price target to $29.00 comes amidst these considerations and reflects Cantor Fitzgerald’s analysis of Intel’s potential strategic moves and their implications for the company’s future. Intel’s overall Financial Health Score currently stands at WEAK, according to InvestingPro’s comprehensive analysis, which is available in the detailed Pro Research Report covering this prominent semiconductor player.

In other recent news, Taiwan Semiconductor Manufacturing Co. (TSMC) is considering acquiring a majority stake in Intel Corp .’s factories, a move requested by the Trump administration to bolster American manufacturing and technological leadership. This potential deal is still in the early stages of discussion. Analysts at Jefferies have maintained a Hold rating on Intel, with a $34 price target, pointing to possible developments involving Intel and TSMC. Baird analysts, on the other hand, have maintained a Neutral rating with a $20 target, suggesting the possibility of a partnership between Intel and TSMC, potentially leading to a new co-owned entity.

Meanwhile, Intel’s new Arrow Lake-based Core Ultra 9 275HX processor has shown promising preliminary performance against competitors, sparking investor interest. Tom’s Hardware’s review indicated that the 275HX outperformed AMD (NASDAQ:AMD)’s Ryzen 9 7945HX3D by 7% in CPU Mark and ran 34% faster than its predecessor, the i9-14900HX. However, these are early benchmarks based on a single processor sample.

These are recent developments, and the market will be closely watching any further developments that could impact Intel’s manufacturing strategy and its position in the global semiconductor industry. It remains to be seen how these potential partnerships and new product performances will unfold in the near future.

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