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On Wednesday, Seaport Global Securities began coverage on Intel Corporation (NASDAQ:INTC), assigning a Sell rating to the company’s shares with a price target set at $18.00. This target sits below Intel’s current trading price of $20.34, though InvestingPro data shows the stock is currently undervalued based on its Fair Value model. Seaport’s analysis pointed to several challenges Intel faces, including the loss of its manufacturing edge which has led to its products struggling against competitors. According to InvestingPro, 26 analysts have recently revised their earnings expectations downward for the upcoming period. The firm noted Intel is losing market share in the PC segment to AMD (NASDAQ:AMD) and also in the data center CPU market to AMD and other semiconductor companies.
The analyst at Seaport Global Securities highlighted that Intel lacks a coherent strategy in artificial intelligence (AI), with significant data center spending shifting towards NVIDIA (NASDAQ:NVDA). Additionally, concerns were raised regarding the financing of Intel’s Foundry services and internal manufacturing, which is projected to require around $100 billion over the next three years, with no clear path to securing this funding. These concerns appear justified, as InvestingPro data reveals Intel’s negative free cash flow of -$12.8 billion and an overall WEAK Financial Health Score. Get access to Intel’s comprehensive Pro Research Report and 12+ additional key metrics with an InvestingPro subscription.
Intel’s manufacturing process roadmap appears to be on schedule; however, Seaport analysts believe that the market underestimates the time required for these processes to reach maturity. They also expressed skepticism about Intel Foundry’s ability to operate as a viable standalone entity before 2030.
The report also mentioned that Intel’s new CEO, Lip Bu Tan, is reportedly considering a further 20% reduction in headcount. This follows a previous reduction of approximately 15% last year, a move that the analysts suggest could cause considerable internal instability within the company. These factors together contribute to the Sell rating and the $18.00 price target for Intel stock, as initiated by Seaport Global Securities.
In other recent news, Intel Corporation reported its Q1 2025 earnings, delivering an earnings per share (EPS) of $0.13, which significantly exceeded the forecast of $0.0033. The company’s revenue reached $12.7 billion, surpassing the projected $12.25 billion. Despite this positive performance, analysts such as Rosenblatt Securities and Mizuho (NYSE:MFG) Securities have expressed concerns about Intel’s future outlook. Rosenblatt cut Intel’s stock price target to $14, maintaining a Sell rating, citing worries about demand in the upcoming quarters and Intel’s guidance falling short of expectations. Meanwhile, Mizuho reduced its price target to $22, maintaining a Neutral rating, highlighting potential delays in product launches and macroeconomic risks. Intel’s new CEO, Lip-Bu Tan, has announced plans to streamline operations and cut operational expenses, aiming for $17 billion in 2025 and $16 billion in 2026. Additionally, the company is focusing on delivering leading-edge technology and adhering to its product roadmap, despite challenges. These developments reflect Intel’s ongoing efforts to navigate a challenging economic environment and improve its competitive position.
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