Intel Shifts Reporting Structure Amidst Market Turbulence
Intel Corp INTC shares took a nosedive in early trading as news broke of a staggering $7 billion loss in the company’s foundry business. The tech giant’s market performance was rattled by this unexpected financial upheaval.
Analysts Break Down the Numbers
BofA Securities Weighs In
Vivek Arya, an analyst at BofA Securities, reiterated a Neutral rating for Intel stock and maintained a price target of $50. A significant disclosure at an event unveiling a new reporting structure revealed historical sales and operating profit data for Intel’s Product, Foundry, and Other segments. Arya underlined the looming threats of competition in these sectors and emphasized the vital role of maintaining profitability at the Foundry division for overall growth.
Wedbush Analysis
Matt Bryson from Wedbush retained a Neutral rating and a $40 price target for Intel. Bryson expressed concerns over Intel’s ambitious 2030 targets for gross and operating margins, highlighting the potential challenges ahead. Despite the extended timeline for margin improvement, Bryson emphasized the critical importance of Intel’s success in enhancing its manufacturing competitiveness.
Cantor Fitzgerald’s Perspective
C.J. Muse, an analyst at Cantor Fitzgerald, reiterated a Neutral rating with a target price of $50. Muse commended Intel’s strategic shift in financial reporting, which aimed to enhance operational efficiency through increased transparency and accountability. However, he noted that achieving manufacturing leadership would be a gradual process, with significant milestones expected by 2027.
Benchmark’s Takeaways
Cody Acree, an analyst at Benchmark, reaffirmed a Buy rating and a price target of $62 for Intel. Acree highlighted Intel’s strategy to boost operating margins by focusing on leading-edge manufacturing nodes. Additionally, he emphasized the potential for Intel Foundry to cater to a larger share of Intel’s products and seize growth opportunities in external markets.
Truist Securities Evaluation
William Stein from Truist Securities maintained a Hold rating and assigned a price target of $45. Stein flagged concerning trends in the Foundry business, characterized by negative gross and operating margins. He underscored the importance of Intel’s profitability targets by 2030, expressing reservations about the pace of improvement in the company’s financial metrics.
Insights from Oppenheimer
Rick Schafer, an analyst at Oppenheimer, upheld a Perform rating for Intel stock. Schafer noted Intel’s reorganization efforts to delineate its products and foundry businesses, emphasizing the need for operational efficiency and streamlined processes. He anticipated a boost in gross margins following product launches and process enhancements in the foundry division.
Intel Stock Reactions
INTC Price Action: At the time of publication, shares of Intel had plummeted by 7.11% to $40.82, reflecting the volatile market response to the company’s financial revelations.
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