Bullish indicating open at $55-$60, IPO prices at $37
On Monday, Mizuho (NYSE:MFG) Securities adjusted its price target for Intel Corporation (NASDAQ:INTC), increasing it to $23.00 from the previous $20.00. The firm maintained a Neutral stance on the stock, even as Intel, currently valued at $108.4 billion, has shown strong momentum with a 24% gain year-to-date. The revision follows recent speculations about Intel possibly breaking up or spinning off some of its operations. According to InvestingPro data, Intel remains a prominent player in the Semiconductors industry, though 26 analysts have recently revised their earnings expectations downward. Mizuho’s analysis highlighted several points that could impact Intel’s future strategic decisions.
Firstly, there are potential challenges for Taiwan Semiconductor Manufacturing Company (TSMC) being the sole buyer of Intel’s foundry business. U.S. officials are likely to prefer involving an American company in the transaction. Secondly, the prospect of spinning off certain products to Broadcom Inc. (NASDAQ:AVGO) is deemed possible but difficult due to Broadcom’s substantial net debt of approximately $57 billion after acquiring VMware (NYSE:VMW) Inc. Intel’s own financial position shows some strain, with InvestingPro analysis indicating negative free cash flow and profitability challenges in the last twelve months.
Additionally, a split could lead to the sale of shares in Mobileye (MBLY), Intel’s self-driving technology unit. Finally, there is the possibility of an earlier-than-anticipated initial public offering or privatization of Altera, a subsidiary of Intel.
Mizuho’s commentary indicates that although no changes have been made to their earnings estimates for Intel, the firm anticipates that Intel’s foundry business might gain momentum, especially with the Trump administration’s efforts to encourage the domestic production of artificial intelligence chips. This optimism about Intel’s foundry prospects is reflected in the increased price target. Despite the potential strategic moves, Mizuho continues to rate Intel shares as Neutral.
In other recent news, Intel Corporation has been the focus of several significant developments. Fitch Ratings has revised Intel’s outlook from Stable to Negative, citing concerns over the company’s competitive landscape and its slower-than-expected de-leveraging efforts. This comes as Intel continues to face challenges in the PC and server markets, with Fitch predicting mid-single-digit revenue growth in 2025. Meanwhile, Silver Lake Management is in exclusive talks to acquire a majority stake in Intel’s Altera unit, a move that could reshape Intel’s business strategy. Additionally, Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly considering acquiring a majority stake in Intel’s factories, following discussions with Trump administration officials. In the realm of analyst perspectives, Cantor Fitzgerald has raised Intel’s stock price target to $29, maintaining a Neutral rating while expressing concerns about Intel’s leadership and financial health. Mizuho analysts have dismissed recent rumors of TSMC acquiring a controlling interest in Intel’s U.S. factories, noting a lack of institutional support for such a deal. These developments highlight ongoing strategic shifts and market speculation surrounding Intel.
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