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On Wednesday, Susquehanna increased its price target for Intel Corporation (NASDAQ:INTC) shares to $24, up from the previous $22, while maintaining a Neutral rating on the stock. The adjustment comes ahead of Intel’s first-quarter earnings report, which is scheduled for Thursday, April 24, 2025. According to InvestingPro data, Intel’s stock has declined nearly 8% in the past week, with current analysis suggesting the stock is slightly undervalued. Get access to additional insights and 8 more exclusive ProTips for Intel through InvestingPro’s comprehensive analysis platform.
Analysts at Susquehanna anticipate Intel to deliver first-quarter results that align with expectations, citing better performance in the PC sector potentially due to tariff-related demand, which may offset the ongoing weakness in the Server segment. They also forecast a slight year-over-year increase in notebook builds for 2025, which is a more optimistic view compared to their previous estimate of flat growth. This outlook comes as Intel, a prominent player in the Semiconductors industry with $53.1 billion in revenue, aims to reverse its recent challenging performance.
The report highlighted that Intel appeared to have lost a modest share of the laptop CPU market while gaining in desktops. The recent launches of Lunar Lake and Arrow Lake chips have shown slower ramp-up in market share compared to previous generations. The slower adoption of these new products could, paradoxically, benefit Intel’s gross margins since they are manufactured using expensive external TSM tiles.
Looking forward, the analysts mentioned Intel’s next-generation Panther Lake product, set to launch in the second half of 2025, which is expected to contribute to margin improvements in 2026. However, they noted market share losses in the Data Center Artificial Intelligence (DCAI) segment to AMD (NASDAQ:AMD) due to a slower than anticipated ramp-up of Intel’s E-core products, also known as Sierra Forest.
Additionally, the report covered Intel’s other business areas, including the Foundry business, where increased customer interest in the 18A process is reported. The new CEO Lip-Bu Tan is expected to provide a more detailed update at the upcoming Foundry Direct Connect event. For Mobileye, Intel’s autonomous driving technology subsidiary, the analysts expect headwinds from auto-related tariffs and competition in China.
In summary, Susquehanna believes Intel will post generally in-line results and guidance, reiterating a Neutral stance on the stock but adjusting the price target to reflect a slightly more positive outlook. With earnings just 9 days away, InvestingPro subscribers can access detailed financial health scores, comprehensive valuation metrics, and expert analysis through the Pro Research Report, available for Intel and 1,400+ other top US stocks.
In other recent news, Intel Corporation has announced the sale of a 51% stake in its subsidiary, Altera, to private equity firm Silver Lake for $8.75 billion. This transaction is part of CEO Lip-Bu Tan’s strategy to focus on Intel’s core x86 business and is expected to be completed in the second half of 2025. The valuation of Altera is significantly lower than the $16.7 billion Intel paid in 2015, reflecting Altera’s lower gross margins compared to its competitors. Analysts from firms like Raymond (NSE:RYMD) James and BofA Securities maintain neutral ratings on Intel, noting that while the sale aligns with Intel’s strategic realignment, it may be dilutive to long-term earnings per share.
Raghib Hussain is set to take over as CEO of Altera, succeeding Sandra Rivera, starting May 5, 2025. The appointment is anticipated to enhance Altera’s competitiveness, particularly in the mid-range sector where it has faced challenges. Despite the valuation concerns, analysts from Stifel express optimism about Intel’s strategic direction under CEO Lip-Bu Tan, suggesting potential improvements in Altera’s margins and sales growth. Meanwhile, Baird analysts highlight the potential for Altera to rebuild its market share in high-end FPGA applications, despite previous setbacks in the mid-range market. The sale of Altera marks a significant step in Intel’s broader strategy to focus on its core operations while maintaining a minority stake in the subsidiary.
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