Intel's Market Share Potential and Geopolitical Factors Keep Analysts Hopeful

Evercore ISI Group's Mark Lipacis lowered their price target on Intel (NASDAQ: INTC) by 10% from $40 to $36 on 2024/04/26. The analyst maintained their Hold rating on the stock.

Despite a "beat/miss print," Lipacis reminded investors that Intel is "one of only three companies in the world that can manufacture leading-edge transistors" after assessing the company's Q1 2024 earnings report, released on April 25. While Intel reported earnings per share (EPS) of $0.18, beating the Zacks Consensus Estimate of $0.13 and Q1 2023's $(0.04), the revenue of $12.7 billion missed the Zacks Consensus Estimate of $12.9 billion. However, it still represented an 8.5% increase compared to Q1 2023's $11.7 billion.

Lipacis maintained their belief that Intel has the potential to capture more market share, especially considering the changes in the geopolitical climate over the past three years. The analyst contended that if management executes its foundry strategy correctly, there is a "blue-sky scenario where it could capture 2x-to-3x more than the 15% share of the leading-edge foundry market it is targeting by 2030."

Intel's Q2 2024 guidance includes an EPS of $0.10, revenue between $12.5 billion and $13.5 billion, and a gross margin of 43.5%. CEO Pat Gelsinger expressed confidence in the company's plans to drive sequential growth throughout the year, emphasizing their focus on innovation, execution, and shareholder value creation.

However, other analysts have also updated their ratings and price targets for Intel on April 26. Morgan Stanley's Joseph Moore lowered their price target by 25% from $48 to $36 and maintained their Hold rating on the stock. Wells Fargo's Aaron Rakers decreased their price target by 11.6% from $43 to $38, also maintaining a Hold rating. Additionally, Wedbush's Matt Bryson lowered their price target by 18.8% from $40 to $32.5, while keeping their Hold rating intact.

According to WallStreetZen, 21.7% of top-rated analysts currently rate INTC as a Strong Buy or Buy, while 65.2% see it as a Hold. On the other hand, 13% recommend or strongly recommend selling the stock. The consensus forecast among analysts is that INTC's upcoming year will deliver an EPS of $1.12, indicating a 16.8% increase on a year-over-year basis.

Intel's stock price has experienced a 9.2% decrease since the release of its latest quarterly report on April 25. However, it has still managed to achieve a 9.7% increase year-over-year. During this period, Intel has trailed the S&P 500, which has seen a rise of 25.7%.

It is worth noting that Mark Lipacis, the analyst who lowered Intel's price target, is ranked in the top 3% of Wall Street analysts by WallStreetZen. With an average return of 24% and a win rate of 65.6%, Lipacis specializes in the Consumer Cyclical, Communication Services, and Technology sectors.

Intel Corporation, headquartered in Santa Clara, California, is a global leader in the design, manufacture, and sale of computer products and technologies. The company operates through various segments, including CCG, DCG, IOTG, Mobileye, NSG, PSG, and All Other. Intel offers a wide range of platform products, such as central processing units and chipsets, as well as non-platform products like accelerators, boards and systems, connectivity products, graphics, and memory and storage products. The company also provides high-performance compute solutions for specific verticals and embedded applications, as well as solutions for assisted and autonomous driving. Intel serves original equipment manufacturers, original design manufacturers, and cloud service providers, and has strategic partnerships in areas such as artificial intelligence research.

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