CFRA Stays Sidelined on Intel (INTC) Even Though 'we like potential growth prospects'
CFRA analyst Angelo Zino reiterated a Hold rating and $45.00 price target on Intel (NASDAQ: INTC).
The analyst comments "
INTC has been awarded $8.5B in grants from the CHIPs Act, in line with our expectation, which will be used to help support $100B+ in investments it plans to make over a five-year span. Up until now, less than $2B in CHIPs awards had been granted (GFS $1.5B, MCHP $162M, and BAE for $35M). Although we like potential growth prospects tied to INTC's foundry expansion plans, execution risk remains (e.g., U.S. skills shortage) and we await greater confirmation of large scale orders. We also note that FCF generation will likely remain elusive through 2025 given capex needs ($20B+ annually), but recent/planned asset divestitures and industry recovery should help. The U.S. is relying heavily on INTC to meet ambitious goals to manufacture 20% of leading-edge chips domestically by the end of the decade. Yet, the industry's success to de-risk manufacturing away from Taiwan (over 50% of total foundry production and 90% of leading-edge chips), in the U.S. or not, will be more important given elevated geopolitical risks."
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Shares of Intel closed at $42.05 yesterday.