Intel's EPS forecast cut by KeyBanc on non-controlling interest impact

Published 16/08/2024, 20:10
Intel's EPS forecast cut by KeyBanc on non-controlling interest impact

On Friday, KeyBanc maintained a Sector Weight rating on Intel Corporation (NASDAQ: NASDAQ:INTC), adjusting its future earnings per share (EPS) forecasts for the tech giant. The firm cited the growing influence of non-controlling interests (NCI) on Intel's earnings, a factor that was previously considered insignificant.

The updated estimates project that NCI will amount to approximately

$700 million in 2025, driven by increased contributions from Intel's subsidiaries Mobileye (MBLY), Altera (ALTR), IM Flash Technologies (IMS), and the Semiconductor Co-Investment Program (SCIP) in partnership with Brookfield and Apollo.

Consequently, KeyBanc has revised its EPS predictions for Intel downward to $0.26 for 2024 and $1.18 for 2025. These figures represent a decrease from the prior estimates of $0.27 and $1.30 for the respective years.

The revision in Intel's earnings outlook is influenced by the expectation that the company's joint ventures and partnerships will have a more substantial impact on its financial performance.

Intel's collaborations, particularly those within SCIP, are anticipated to play a pivotal role in shaping its earnings trajectory over the next few years.

The lower EPS estimates reflect KeyBanc's assessment of the potential financial effects of NCI on Intel's profitability. The adjustment suggests that while Intel's operational segments like Mobileye and Altera are expected to contribute positively, their financial impact will be partially offset by the interests of co-investors.

Intel's stock rating remains unchanged at Sector Weight, indicating KeyBanc's view that the company's shares are expected to perform in line with the sector's average returns. The new EPS estimates are now part of KeyBanc's analysis as investors consider the tech company's future earnings potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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