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On Friday, Morgan Stanley (NYSE:MS) analyst Joseph Moore revised the price target for Intel Corporation (NASDAQ: NASDAQ:INTC) shares, reducing it to $25.00 from the previous $25.58. Despite the adjustment, the firm maintained its Equalweight rating on the stock. With Intel currently trading at $19.82 and near its 52-week low of $18.51, InvestingPro analysis suggests the stock is slightly undervalued. Moore’s assessment indicates a cautious outlook for Intel, noting that the company’s guidance for the March quarter suggests a fourth consecutive quarter of year-over-year revenue declines.
Intel’s ongoing revenue challenges are attributed to persistent weak demand in the end markets, with the company reporting $53.1 billion in revenue and showing negative earnings of $4.38 per share over the last twelve months. Moore believes that the demand will eventually improve, emphasizing that the product strategy will be pivotal in reversing the current downward trends. He also pointed out that while there are limited downside risks, Intel has options to reduce spending that would not adversely affect the core business’s turnaround efforts. InvestingPro subscribers have access to 12 additional key insights about Intel’s financial health and future prospects.
Morgan Stanley’s valuation approach for Intel has shifted due to the anticipated return of profitability within the forecast period. The firm has moved from valuing Intel based on enterprise value to sales (EV/S) to a price-to-earnings (PE) based valuation. As a result, the target multiple has been rolled over to 2026, consistent with Morgan Stanley’s historical coverage approach. For a deeper understanding of Intel’s valuation metrics and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro, covering this $85.22 billion market cap semiconductor giant.
The target multiple assigned to Intel is 17.5 times earnings, which is at the lower end of the range for computing semiconductor companies, reflecting the growth challenges that Intel faces. This revaluation has resulted in a slight decrease in the price target to $25.00.
Moore’s commentary and the updated price target reflect a measured perspective on Intel’s near-term prospects, considering both the potential for improvement in product demand and the strategic measures available to the company to mitigate financial pressures while working on its turnaround.
In other recent news, Intel Corporation’s fourth-quarter earnings surpassed expectations, reporting revenue of $14.3 billion 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. Analyst firms, including Benchmark, Cantor Fitzgerald, Goldman Sachs, Rosenblatt Securities, and BofA, have revised their price targets for Intel, reflecting mixed outlooks.
Intel 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. Furthermore, the company announced collaborations with United Microelectronics Corporation and the construction of a new manufacturing complex in Ohio. These are recent developments that could impact Intel’s strategic direction and operational efficiency.
Despite challenges such as declining revenue and increasing competition, Intel’s management remains committed to improving its market position and enhancing its product offerings. The company is focusing on returning to positive free cash flow, reducing capital expenditures, and pursuing asset sales in 2025. These strategic moves are being closely monitored by analysts from firms such as Needham and Bernstein.
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