Analysts Maintain Neutral Stance on Intel Stock Amid Market Uncertainties

Mizuho maintains Neutral rating on Intel stock with steady price target By Investing.com

Mizuho has maintained its Neutral rating on Intel Corporation (NASDAQ: NASDAQ:INTC) with a price target of $22.00. The decision comes amid several significant developments for the tech giant. Intel has recently been in the spotlight due to its announcement of a multi-year, multi-billion dollar collaboration with Amazon (NASDAQ:AMZN) Web Services (AWS) to create AI custom chips, which are expected to be delivered around 2026. The company has also secured up to $3 billion in funding from the U.S. CHIPS Act, aimed at bolstering semiconductor manufacturing for national defense purposes. Additionally, Intel has restructured its foundry services to function as a separate entity within the company, a move intended to enhance operational transparency. However, Intel still faces the challenge of improving its execution within this domain. Intel is halfway through its cost reduction plan, having completed approximately 50% of its workforce reduction, which is part of a broader effort to save $10 billion. Despite these initiatives, the firm has decided to put a hold on its fabrication plant expansion projects in Germany and Poland, delaying them for about two years. In other recent news, analysts from Exane BNP Paribas (OTC:BNPQY) maintained an underperform rating on Intel, acknowledging the company's recent success with its 18A process technology, despite potential limited impact on volume increases. Meanwhile, Roth/MKM and TD Cowen maintained their neutral stances, noting Intel's advancements in foundry manufacturing and the recent multi-billion dollar agreement with Amazon Web Services (AWS) respectively. KeyBanc Capital Markets also continued its Sector Weight rating, appreciating Intel's cost management but expressing concerns about the company's growth strategy. Wolfe Research, maintaining its Peerperform rating, highlighted Intel's recent strategic decisions, including the formal split of its manufacturing business into a separate entity. These developments come in the wake of Intel's recent announcements, including a collaboration with AWS to produce an AI fabric chip using Intel's 18A process technology, significant progress on a $10 billion cost reduction plan, and receiving up to $3 billion in funding from the CHIPS Act for a government security program. The company also revealed plans to establish its Intel Foundry Services as an independent subsidiary. As Intel Corporation (NASDAQ:INTC) navigates through its strategic collaborations and cost reduction efforts, real-time data from InvestingPro offers additional context on the company's financial health and market performance. Currently, Intel's market capitalization stands at $91.81 billion, reflecting its significant presence in the semiconductor industry. Despite the recent challenges, Intel has shown a notable return over the last week, with a price total return of 9.32%, signaling potential investor optimism in the short term. InvestingPro Tips suggest that Intel is trading at a low P/E ratio relative to near-term earnings growth, which could indicate that the stock is undervalued compared to its future earnings potential. Additionally, Intel has maintained dividend payments for 33 consecutive years, showcasing its commitment to returning value to shareholders. For investors seeking a more in-depth analysis, InvestingPro offers 12 additional tips on Intel, available at InvestingPro's Intel-specific page. The company's P/E ratio currently stands at 93.35, with an adjusted figure of 47.68 for the last twelve months as of Q2 2024. This high earnings multiple could be a point of concern for value-focused investors. However, the PEG ratio of 0.47 suggests that the company's earnings growth might not be fully reflected in the current stock price. With these metrics in mind, investors can better assess Intel's position in the market and the potential risks and opportunities associated with the stock.

Intel maintains Neutral rating from Roth/MKM with steady price target By Investing.com

Roth/MKM has maintained a neutral stance on Intel Corporation (NASDAQ: NASDAQ:INTC), reiterating a $25.00 price target for the tech giant's shares. The firm acknowledged Intel's recent announcements regarding advancements in its foundry manufacturing and efforts to sharpen its overall portfolio focus. According to the firm, Intel's strategy is centered on establishing a competitive manufacturing base, securing long-term contracts with major foundry clients, optimizing its corporate portfolio, and enhancing its financial standing. The firm noted Intel's accelerated restructuring initiatives, which are seen as positive steps towards increasing the company's competitiveness in the foundry sector. However, Roth/MKM has chosen to keep a watchful eye for further progress before adopting a more constructive view of Intel's stock. Intel's strategy includes a significant emphasis on improving its manufacturing capabilities to compete more effectively with external foundries. This involves ensuring that they can attract and retain large customers by offering long-term contract visibility, which is crucial for stability and growth in the semiconductor industry. Additionally, Intel is actively working on focusing and rightsizing its corporate portfolio. This move is aimed at streamlining operations and concentrating on the most profitable and promising areas of its business. Lastly, the company is taking proactive measures to improve its corporate funding position. By bolstering its financial health, Intel aims to have the necessary resources to invest in growth opportunities and navigate through the competitive landscape of the technology sector. In other recent news, Intel Corporation has made significant strides in its operations and strategic partnerships. The company recently announced a series of initiatives, including a collaboration with Amazon (NASDAQ:AMZN) Web Services (AWS) to produce an AI fabric chip using Intel's 18A process technology. This agreement is seen as a major endorsement of Intel's technology and a significant win for Intel's Foundry services, as per TD Cowen. Intel also revealed plans to establish its Intel Foundry Services (IFS) as an independent subsidiary and implement various organizational changes aimed at cost savings. The company is actively working on a $10 billion cost reduction plan and indicated significant progress, including being more than halfway through its target of reducing its workforce by 15,000 employees by the end of the year. Analysts from KeyBanc Capital Markets and TD Cowen maintained neutral stances on Intel, with KeyBanc keeping a Sector Weight rating and TD Cowen holding a steady price target. Northland reiterated an Outperform rating, emphasizing Intel's strategic ties with the U.S. Department of Defense and the potential for a company split. Intel received up to $3 billion in funding from the U.S. government under the CHIPS and Science Act for its Secure Enclave program, aimed at expanding trusted semiconductor manufacturing for national defense purposes. The company has also been awarded eligibility for up to $3.5 billion in federal grants aimed at producing semiconductors for the U.S. Department of Defense. Finally, Intel's subsidiary, Mobileye, announced a strategic shift in its operations, ceasing internal development of next-generation frequency modulated continuous wave lidars, a component previously deemed crucial for autonomous driving systems. Intel Corporation (NASDAQ: INTC) has been navigating a challenging period, reflected in the market data. With a market capitalization of $91.55 billion, the company is trading at a P/E ratio of 91.17, which is high relative to its near-term earnings growth. Despite this, Intel remains a prominent player in the Semiconductors & Semiconductor Equipment industry. Investors should note that while net income is expected to drop this year, Intel has a history of maintaining dividend payments, with a track record of 33 consecutive years. However, it's important to consider that the stock price has seen a significant decline over the last three months, with a 36.14% drop in price total return, and a steeper six-month price total return decrease of 53.41%. On the brighter side, analysts predict that Intel will be profitable this year, and it has been profitable over the last twelve months. The company's commitment to its dividend payments, despite the current financial metrics, speaks to its dedication to shareholder value. For those interested in a deeper analysis, InvestingPro offers additional insights and tips on Intel, providing a more comprehensive understanding of its stock performance and potential investment opportunities. There are currently 11 more InvestingPro Tips available for Intel at Investing.com.

TD Cowen maintains Hold rating on Intel shares with steady price target By Investing.com

The firm acknowledged Intel's recent multi-year, multi-billion dollar agreement with Amazon (NASDAQ:AMZN) Web Services (AWS), which includes a custom "AI fabric chip" based on Intel's 18A technology. The deal is seen as a significant endorsement of Intel's 18A technology and secures a major customer for Intel's Foundry services. The announcement came just as TD Cowen began its coverage of the semiconductor giant, marking an auspicious start. Intel's CEO Pat Gelsinger shared a letter outlining the future direction of the company following a board meeting, detailing the next phases of its turnaround strategy. This strategic move by Intel is aimed at reinforcing its position in the semiconductor industry. Intel's collaboration with AWS represents a pivotal step in the company's efforts to expand its footprint in the foundry and artificial intelligence sectors. The custom AI chip is part of a broader initiative by Intel to innovate and provide tailored solutions to significant cloud service providers. The agreement with AWS is a milestone for Intel as it seeks to demonstrate the capabilities of its 18A technology. This technology is expected to play a crucial role in Intel's product offerings and competitive strategy moving forward. In other recent news, Intel Corporation has been the recipient of substantial government support. The company has secured eligibility for up to $3.5 billion in federal grants for producing semiconductors for the U.S. Department of Defense. This development is in line with the U.S. government's strategy to bolster domestic chip manufacturing for critical sectors, including national defense. Additionally, Intel has been awarded up to $3 billion for its Secure Enclave program, aimed at expanding trusted semiconductor manufacturing for national defense purposes. Intel's subsidiary, Mobileye, announced a strategic shift in its operations, ceasing internal development of next-generation frequency modulated continuous wave lidars. On the financial front, the company recently announced a new $60 billion share buyback program and a 10% increase in its quarterly dividend. Northland maintains a positive outlook on Intel, reiterating an Outperform rating, highlighting Intel's strategic ties with the U.S. Department of Defense and potential for a company split. On the other hand, Citi has retained its Neutral rating on Intel's shares, expressing caution about the profitability of customizing Xeon chips. In light of TD Cowen maintaining a Hold rating on Intel Corporation (NASDAQ:INTC), recent real-time data from InvestingPro offers additional context for investors. Intel's market capitalization stands at $89.41 billion, reflecting its significant presence in the semiconductor industry. Despite a challenging market environment, Intel's price-to-earnings (P/E) ratio is currently 91.17, which is expected to adjust to 46.43 in the last twelve months as of Q2 2024. This suggests that while the stock may seem expensive based on current earnings, there is anticipated earnings growth that could make the valuation more attractive in the near term. Moreover, Intel's revenue has seen a modest growth of 1.99% in the last twelve months as of Q2 2024. While this growth rate is relatively low, it demonstrates stability in Intel's revenue streams. Additionally, the company's gross profit margin stands at 41.42%, indicating a strong ability to control costs and maintain profitability. InvestingPro Tips highlight that Intel is trading at a low P/E ratio relative to near-term earnings growth, which may interest value investors looking for potential upside. Furthermore, as a prominent player in the Semiconductors & Semiconductor Equipment industry, Intel's longstanding dividend payments, which have been maintained for 33 consecutive years, could be appealing for income-focused investors. For those interested in exploring more about Intel's investment potential, there are over 10 additional InvestingPro Tips available at https://www.investing.com/pro/INTC, providing deeper insights into Intel's financial health and market position.

Citi maintains Neutral rating on Intel shares with steady price target By Investing.com

Citi has retained its Neutral rating on Intel Corporation (NASDAQ: NASDAQ:INTC), with a consistent price target of $25.00. The decision follows Intel's recent announcement of a significant deal with Amazon (NASDAQ:AMZN) Web Services (AWS) to supply custom Xeon processors and develop an AI fabric chip. Despite the new business, Citi remains cautious about the profitability of customizing Xeon chips, suggesting these could potentially yield lower margins. Intel disclosed on Monday that it had secured a multi-billion-dollar agreement to provide AWS with tailored Xeon chips. This deal was not considered a true foundry win by Citi since Intel already manufactures Xeon processors. The concern lies in the customization of these chips, which may lead to reduced profit margins for Intel. In addition to the AWS deal, Intel announced it has been awarded up to $3.0 billion in contracts from the U.S. government, spread over several years. The financial firm's analyst cited these recent developments as reasons for maintaining the Neutral rating on Intel's stock. According to the firm, while the government contracts are beneficial, they are not expected to drastically change the company's trajectory over the time frame specified. Citi's stance reflects a cautious outlook on Intel's foundry business, with the recommendation that the company should consider exiting this segment. The firm's reiteration of the Neutral rating indicates that, despite the new deals with AWS and the U.S. government, there is no change in the expected performance of Intel's stock in the near term. Meanwhile, Intel been awarded up to $3 billion for its Secure Enclave program, aimed at bolstering the resilience of U.S. technological systems, and has also secured eligibility for up to $3.5 billion in federal grants for producing semiconductors for the U.S. Department of Defense. These developments underscore a strategic partnership between Intel and the U.S. government to strengthen America's semiconductor supply chain.

Truist maintains Hold rating on Intel shares with steady price target By Investing.com

Truist Securities has maintained its Hold rating on Intel Corporation (NASDAQ: NASDAQ:INTC) with a set price target of $25.00. The decision comes following a letter addressed to Intel employees by CEO Pat Gelsinger, which discussed the company's ongoing transformation. The letter, dated Monday, mentioned several key developments including design wins with Amazon (NASDAQ:AMZN) for AI applications, a $3 billion injection from the U.S. government, and the strategic move to spin off Intel Foundry as an independent subsidiary. The analyst from Truist Securities acknowledged these updates positively but indicated that they do not sufficiently offset the more significant challenges facing Intel. Despite the recent developments and their potential benefits, the analyst's outlook and financial projections for Intel remain unchanged. Intel's collaboration with Amazon on 18A technology for AI applications marks a significant design win for the company. Additionally, the financial boost from the U.S. government is expected to support Intel's growth and innovation efforts. The decision to separate Intel Foundry into a separate entity is part of the broader restructuring efforts aimed at enhancing the company's operational efficiency and market focus. Intel's stock performance and investor sentiment will likely continue to be influenced by its strategic initiatives and ability to navigate industry challenges. The company's efforts to transform and adapt to the competitive landscape of the semiconductor industry are critical factors that market watchers will continue to monitor closely. Arm Holdings (NASDAQ:ARM) also announced the appointment of Young Sohn to its board of directors. Sohn, a seasoned industry veteran with extensive experience in business development, investment strategy, and sustainability, is expected to support Arm's growth in key markets and its development of foundational computing platforms for the AI era. Analysts have maintained positive stances on Arm Holdings. Morgan Stanley (NYSE:MS) reaffirmed an Overweight rating, highlighting the company's favorable position to capitalize on the shift towards edge AI and the increasing adoption of Armv9 architecture in mobile devices. Similarly, Loop Capital and TD Cowen have both maintained a Buy rating, reflecting the company's strong performance in licensing and potential market share growth. The company is set to join the Nasdaq100 index in the fourth quarter of 2024, which often results in increased demand for a stock.

Analysts say don't chase this Intel pop here

Wall Street analysts are still skeptical on Intel despite its latest moves aimed at righting the ship. Shares of Intel gained more than 3% on Tuesday after the chipmaker said it would turn its foundry business into an independent unit -- allowing it to raise outside capital . The company also announced an expanded collaboration to supply Amazon Web Services with Xeon chips and produce a custom AI fabric chip, as well as additional U.S. government funding. Still, Bank of America kept its underperform rating, and JPMorgan reiterated the stock as underweight. Bernstein, Citi and Wells Fargo respectively reiterated their market-perform, neutral and equal-weight ratings. While the analysts viewed Intel's announcements as a positive, most emphasized the statements were better clarification on the company's strategy rather than actual incremental changes. INTC 1D mountain INTC rises "There was no new financial model provided (unchanged opex cuts, no new capex intensity) nor were there any updates on success of critical 18A manufacturing node," wrote Bank of America's Vivek Arya. "AWS win sounds impressive but INTC has already been supplying AWS with CPU for a long time so customization isn't exactly something new, while the AI fabric (networking) win on 18A will probably matter only from CY26 while competing against tough Ethernet switch incumbency from AVGO and others." Arya's $21 price target on the stock implies less than 1% upside from Monday's close. Citi analyst Christopher Danely acknowledged Intel's $3 billion CHIPS Act funding as a "mild positive," but doesn't see this moving the needle in the near term since this is over several years. The analyst added that Intel's plan to establish its foundry business as an independent subsidiary was "expected and not good." "We expect Intel's EPS to be under pressure given its foundry business, which we believe has minimal chance of succeeding," he wrote. Danely's price target of $25 points to nearly 20% upside. Intel shares have lagged the broader semiconductor sector year to date, losing 56% in that time. Meanwhile, The VanEck Semiconductor ETF (SMH) has soared nearly 35% in 2024.

Intel Leaves Wall Street Unimpressed With Amazon Deal - JPMorgan, BofA Remain Skeptical

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Intel's blockbuster announcement of a partnership with Amazon yesterday that set its shares soaring by 8% in aftermarket has left Wall Street unimpressed as major investment banks believe any new benefits from the deal are well out in the future. Intel announced a multi billion dollar partnership with Amazon yesterday without delving into the specifics, and JPMorgan, Bank of America and Evercore all note that while the firm's latest decision to spin out Intel Foundry Services as a subsidiary is good for transparency, any revenue from its advanced 18A manufacturing process is well out in the future. BofA, with an Underperform rating and $21 price target for Intel's shares, believes that the firm's "AI fabric win on 18A likely won't be significant until 2026, and it will face strong competition from Broadcom (AVGO) and others." Intel aims to enter production with 18A in 2025, and Wall Street banks and analysts believe that revenue from this process should materialize in the year after. BofA adds that Intel's $3 billion win from the US government and its Amazon deal "raised more questions than answers" and the "creation of Intel Foundry as an independent subsidiary and pauses in certain investments in Poland and Germany also lack clarity." With no new financial model provided, the bank is unimpressed by the decision to make Foundry a subsidiary as it doubts that the "move is anything beyond a reporting change." Potential updates from Intel on the 18A process might change BofA's mind as it also bemoans the manufacturing technology's absence in the latest announcements. JPMorgan concurs with BofA as far as being unimpressed by the AWS deal is concerned. With an Underweight rating on the stock and a share price target of $26, it views "Intel's recent announcements as providing better clarification on previously disclosed actions rather than representing incremental changes." However, the bank does believe that the future of the foundry division might be brighter as Intel's order pipeline for the business is growing. JPMorgan expects a "meaningful revenue ramp from external foundry customers by 2027," and as the AWS deal only shows the growing confidence among semiconductor designers for Intel's foundry business, the bank finds it insufficient to change its metrics for an increase in Intel's share price target. Evercore also views Intel's Amazon deal and other announcements "as incremental positives." It is, however positive about the foundry subsidiary, noting that the decision is a positive step towards increased transparency and accountability in its manufacturing business." The firm adds that it will stay on the sidelines and stick with its share price target of $25 until "there is greater visibility into the success of its [INTEL] foundry business." The firm has an In-Line rating for Intel's shares.