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Northland Raises Intel To Hold, Sees Challenges Priced In The Stock

·2 min read

Northland Securities has upgraded Intel stock to Hold from Sell and maintained a price target of $46 (3.5% upside potential), as the analyst believes that the challenges faced by the semiconductor company are priced in the stock.

Northland analyst Gus Richard said "We, examine the breakup value of INTC and come up with a conservative estimate that exceeds its current EV of Intel. We also believe some of the pieces, would flourish on their own. This includes Moblieye, Altera, and Intel Capital. Perhaps hostile SPAC [special purpose acquisition company] mergers are the next new things."

October was an eventful month for Intel. On Oct. 29, Intel (INTC) acquired startup SigOpt to boost its artificial intelligence applications. However, the company did not disclose the terms of the deal. On Oct. 22, the chipmaker reported 3Q revenues of $18.3 billion that surpassed the consensus estimates of $18.2 billion but declined 4% year-over-year. Its 3Q EPS of $1.11 came in in-line with the Street estimates but plunged 22% from the year-ago quarter.

Intel raised its 2020 revenue outlook to $75.3 billion, compared with the earlier forecast of $75 billion and analysts’ estimates of $75.1 billion. The company expects 2020 adjusted EPS to be $4.90, higher than the earlier forecast and consensus estimate of $4.85. (See INTC stock analysis on TipRanks).

Currently, the Street is sidelined on the stock. The Hold analyst consensus is based on 14 Holds, 6 Buys and 5 Sells. The average price target of $51.44 implies upside potential of about 15.7% to current levels. Shares have dropped by 25.7% year-to-date.

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