What the bad jobs report means for markets
On Friday, Roth/MKM analysts adjusted their outlook on Intel Corporation (NASDAQ:INTC) by reducing the stock’s price target from $25.00 to $20.00, while continuing to hold a Neutral rating on the shares. Currently trading at $20.01 with a market capitalization of $86.1 billion, Intel’s stock has faced significant pressure, declining nearly 53% over the past year. The revision comes in response to Intel’s guidance for the first quarter of 2025, which was set significantly below the typical seasonal trends. The company’s forecast reflects a period of inventory digestion and acknowledges the challenges posed by increased competitive pressures in the market.According to InvestingPro analysis, Intel shows several warning signs, with 10+ additional exclusive insights available to subscribers.
The analysts noted that the anticipated lower revenue, coupled with heightened pricing competition, is expected to negatively affect Intel’s gross margins as indicated in the guidance. The company currently maintains a gross profit margin of 40.1% with annual revenue of $54.2 billion. Despite these challenges, Intel is undergoing a phase of restructuring under new leadership, focusing on streamlining product lines and prioritizing consistent product development.
The firm is closely monitoring Intel’s strategic changes, particularly its efforts to regain momentum in product market share. Roth/MKM’s decision to lower the price target is based on the current market conditions and Intel’s performance outlook, but they remain open to revising their stance if the company demonstrates significant progress in its recovery and competitive positioning.
Intel’s new management team has been tasked with navigating the company through a period of transition, aiming to simplify operations and enhance product execution. The analysts have emphasized the importance of observing further improvements in these areas before considering a more bullish position on the stock.
In summary, Roth/MKM has revised its price target for Intel stock to $20.00 from the previous target of $25.00, maintaining a Neutral stance as the company works through its strategic realignment and faces ongoing market challenges. The firm anticipates reassessing their rating as Intel shows evidence of reclaiming its market share and executing its product strategy effectively.
In other recent news, Intel Corporation has been the subject of multiple analyst reviews. Rosenblatt Securities reaffirmed a Sell rating on the company’s stock with a target price of $20, citing weak PC demand, limited data center sales, and ongoing market share losses. On the other hand, Global Equities Research advised clients to take advantage of the current weakness in Intel’s stock, citing strong prospects for the company’s AI initiatives. Cantor Fitzgerald maintained a Neutral stance on Intel shares, with a price target of $22, while Northland analysts upheld their Outperform rating for Intel, with a $28 price target.
These developments come amidst Intel’s ongoing strategic partnerships and investments. The company’s collaboration with United Microelectronics Corporation on a pilot production line in Arizona is progressing smoothly. Additionally, Intel is continuing its substantial investment in Ohio, with the construction of its new manufacturing complex, known as the Silicon Heartland, moving forward after initial delays. The company also announced its intention to spin off its venture capital arm, Intel Capital, into an independent fund.
The company’s earnings for the fourth fiscal quarter of 2024 are expected to align with current expectations, pegged at $13.8 billion in revenue and Non-GAAP EPS of $0.12. Looking ahead, Rosenblatt projects a slightly negative tilt for Intel’s first fiscal quarter of 2025, with revenue forecasts at $13.0 billion and Non-GAAP EPS of $0.17. These are among the recent developments shaping Intel’s strategic direction and operational efficiency.
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