Market Overview

Intel Could Reach New Peaks In 2020 And Beyond, Says Bullish BofA

Intel Could Reach New Peaks In 2020 And Beyond, Says Bullish BofA

Intel Corporation (NASDAQ: INTC) reported robust results for the first quarter and announced second-quarter sales guidance ahead of expectations.

Concerns around a peak in the demand for personal computers, in data center sales, in the company’s gross margins and its market share versus rival Advanced Micro Devices, Inc. (NASDAQ: AMD) seem to be overblown, according to BofA Securities.

The Intel Analyst

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

The Intel Thesis

Although COVID-19 has constrained visibility, Intel enjoys a unique position with exposure to some of the most resilient segments of the global IT space, Arya said in a Monday note. (See his track record here.)

Despite its strengths, Intel’s shares are trading at a 25-30% discount versus peers and the S&P 500, the analyst said.

Given a portfolio that’s “well levered to secular growth in cloud/5G and high-value US-based manufacturing,” 2020 could be the third consecutive year in which Intel’s stock outperforms the semis industry, he said. 

Although Intel has guided to gross margin contraction for the second quarter, half of the decline is related to progress in 10nm and could reverse in the back half of the year, Arya said.

Despite harsh global macro trends, the company could generate 1-2% sales growth and continue to set new peaks in 2020 and 2021, according to BofA. 

INTC Price Action

Intel shares were down 0.93% at $58.71 at the time of publication Monday. 

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Latest Ratings for INTC

Nov 2020Northland Capital MarketsUpgradesUnderperformMarket Perform
Oct 2020JP MorganMaintainsOverweight
Oct 2020Deutsche BankMaintainsHold

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