Intel Stock Volatility Is A Buying Opportunity, BofA Says After Q1 Report

Intel Corporation’s INTC shares came under pressure during Thursday’s after-hours trading session following the chipmaker's first-quarter report. 

Any volatility in Intel’s stock represents an attractive buying opportunity, given the company’s exposure to data-centric markets and strong balance sheet, according to BofA Securities.

The Intel Analyst

Vivek Arya maintained a Buy rating on Intel with a $70 price target. 

The Intel Thesis

BofA is raising its Intel estimates after the company reported first-quarter results that were significantly ahead of expectations, Arya said in a Friday note. (See his track record here.)

Intel reported sales of $1 billion and earnings of $1.45 per share, beating the consensus estimates on both counts, the analyst said. Sales guidance for the second quarter also came in higher than expected, he said. 

BofA raised its earnings estimates for fiscal 2020 and 2021 from $4.57 per share to $4.65 per share and from $5.07 per share to $5.10 per share, respectively.

Intel is well-positioned due to its exposure to data-centric markets, including cloud, telco and 5G, Arya said.

These markets, which now contribute 51% of the company’s overall sales, are benefiting from the telecommute and stay-at-home themes, the analyst said. 

Intel has limited exposure to the auto and industrial markets, which are the hardest hit, he said, adding that the company’s new products are on track for launch in the back half of 2020.

Intel’s balance sheet, dividend yield and strong free cash flows are “defensive in a downturn,” according to BofA. 

INTC Price Action

Intel shares were down 3.02% at $57.26 at the time of publication Friday. 

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