Analyst Vivek Arya from Bank of America Securities maintained a Sell rating on Intel (INTC – Research Report) and keeping the price target at $21.00.
Vivek Arya has given his Sell rating due to a combination of factors that suggest Intel Corporation (INTC) is grappling with significant challenges. The company’s reliance on external foundries has increased, which Arya sees as a pivotal weakness, especially with the critical 18A node still unproven and the 20A node canceled. Additionally, Intel’s recent deal with Amazon is not a guaranteed revenue source, and overall sales to external customers are projected to be less than 1% of the global foundry market. This indicates a challenging path ahead for Intel to regain its footing in manufacturing.
Furthermore, frequent restructuring within Intel has raised concerns regarding talent retention and the company’s financial health. Intel’s revenue per employee is substantially lower than its competitors, reflecting potential inefficiencies and a lack of profitability. Intel’s stock performance has been underwhelming, and its high debt levels coupled with insufficient free cash flow generation create a precarious situation. The shift in market preference towards ARM architecture, which is gaining traction in both PC and server markets, further threatens Intel’s traditional CPU market share, making Arya’s Sell rating a reflection of these compounded risks.
In another report released on September 17, J.P. Morgan also maintained a Sell rating on the stock with a $26.00 price target.
Based on the recent corporate insider activity of 59 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of INTC in relation to earlier this year.
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Intel (INTC) Company Description:
Intel manufactures and sells microprocessors, chipsets, flash memory as well as other products and platforms for compute, storage, network and other functions. The company’s data-centric businesses include Data Center Group (DCG), Internet of Things (IOTG), Mobileye, Non-volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG), with the PC-centric business comprised of Client Computing Group (CCG). It derives a majority of its revenue from platform products, which incorporate various components and technologies, including a microprocessor and chipset, a stand-alone SoC, or multichip package.
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