Street Calls of the Week
Investing.com - Seaport Global Securities upgraded Intel (NASDAQ:INTC) from Sell to Neutral on Thursday, citing potential strategic shifts regarding the company’s fabrication facilities. The stock, which has surged 55.71% year-to-date and is trading near its 52-week high of $32.38, has shown strong momentum despite current profitability challenges.
The research firm noted significant market undervaluation of Intel’s core products business due to the negative perception of its foundry operations. According to Seaport Global’s calculations, Intel’s market capitalization could potentially be $315 billion to $367 billion—more than double its current market cap of $145.22 billion—if its product division were valued separately from its foundry business. InvestingPro analysis reveals additional valuation insights, with comprehensive metrics and Fair Value calculations available in the Pro Research Report, along with 8 key investment tips for Intel.
Seaport Global believes Intel’s board is exploring options to divest its fabrication facilities, which the firm describes as "a multi-year, deeply complex, painful process" to turn around. The analyst suggests the "path of least resistance" would be "some form of fire sale or outright shut down" of the foundry operations.
The firm acknowledged that while such a move might boost Intel’s valuation in the near term, it expressed concerns about the long-term implications, stating that "five years from now, a world without Intel Foundry is going to be very difficult for the semiconductor ecosystem."
Seaport Global concluded that Intel’s board faces pressure from shareholders who "would like to see the bleeding stop," suggesting that immediate financial considerations may outweigh longer-term industry concerns in the company’s strategic decision-making.
In other recent news, Erste Group has upgraded Intel’s stock rating from Sell to Hold due to the company’s progress in its transformation and improvements in manufacturing technology. The upgrade reflects Intel’s success in increasing production speed. Meanwhile, Bank of America has adjusted its rating on several long-dated Intel bonds from Overweight to Marketweight, following a significant price increase. This adjustment affects Intel’s 3 1/4% notes due in 2049, among others.
In a strategic move, Intel has partnered with Nvidia to develop custom data center and personal computing products. Stifel has maintained a Hold rating on Intel, reflecting the collaboration’s focus on integrating Nvidia’s accelerated computing with Intel’s x86 CPU architecture. Barclays has also raised its price target for Intel to $25.00, citing the integration of x86 with NVLink as a factor that could expand Intel’s data center opportunities. These developments indicate a series of strategic shifts and assessments by various financial firms regarding Intel’s future prospects.
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