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On Thursday, Deutsche Bank (ETR:DBKGn) reiterated a Hold rating on Intel Corporation (NASDAQ:INTC) with a steady price target of $25.00. The firm's analysts pointed out that Intel is likely to continue facing both cyclical and secular challenges in 2025. They noted that Intel's own revenue growth outlook is modest, projecting an increase of 3-5% for the year, which is slightly below Deutsche Bank's own estimate of a 6% year-over-year increase in revenue for 2025.
With current revenue at $54.25 billion and the stock trading near its 52-week low of $18.51, InvestingPro analysis suggests Intel is slightly undervalued, though facing significant headwinds with negative earnings per share of -$3.76.
The analysts also mentioned limited expectations for gross margin (GM) expansion, forecasting a GM of 41.5% in 2025, compared to the current margin of 40.07%. The uncertainty in the PC and Data Center CPU markets is expected to persist, but the analysts believe that Intel's stock price will be more influenced by structural actions in the near to medium term.
Key questions include the appointment of a new CEO, potential value-creating actions, and whether the company's progression in semiconductor node technology is on track. InvestingPro subscribers have access to 10+ additional exclusive insights about Intel's financial health and future prospects, along with comprehensive analysis in the Pro Research Report.
The analysts cited takeaways from a recent meeting at the Consumer Electronics Show (CES), indicating that no major strategic changes are expected during Intel's current transition period. They anticipate that interim management will continue to focus on the strategy already communicated in recent calls, which includes the rollout of the 18A node technology, cost-cutting efforts, and the ramp-up of its Foundry services.
In conclusion, Deutsche Bank's outlook for Intel shares is that they will remain rangebound as the company navigates through both strategic and cyclical transitions. The firm's analysts are maintaining their Hold rating based on these observations.
In other recent news, Intel Corporation has announced a series of significant recent developments. The company plans to spin off its venture capital arm, Intel Capital, into an independent fund, a move aimed at optimizing asset value and improving business focus. Intel has also launched its new AI-focused Intel Core Ultra 200V series processors, with other models expected to follow in the coming months.
Additionally, Intel is progressing with the bidding process for its Altera unit, with private equity firms Francisco Partners, Silver Lake Management, Apollo Global Management (NYSE:APO), and Bain Capital expressing interest. KeyBanc Capital Markets has maintained its sector weight rating on Intel, indicating a positive outlook.
In light of leadership changes, Intel is exploring the possibility of spinning off its manufacturing operations. These developments are part of Intel's strategic efforts to adapt to the evolving landscape of the tech industry and venture capital investment.
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