Intel Upgraded To Buy - Analyst Highlights Strong Gains from Upcoming Server Products And Foundry Growth

Mizuho analyst Vijay Rakesh upgraded Intel Corp INTC from Neutral to Buy and raised the price target from $37 to $50.

The analyst noted that Intel is lining up significant NEW Server product launches and Foundry customer announcements in the next six months. The re-rating reflected a better 2024E Compute and Data Center (DC) product roadmap, a 2024E PC and DC industry upcycle, the Altera FPGA spinoff adding value at $17/share, IFS (Intel Foundry Services) ramp with 18A in 2025E being a critical transition year, and an implied 2024-25E SOTP at ~$84/share. 

Intel traded at a discount to Advanced Micro Devices, Inc AMD and Nvidia Corp NVDA with significant idiosyncratic tailwinds.

Rakesh raised his FY24E revenue, and EPS estimates from $60.9 billion and $1.74 to $63.8 billion and $2.01 (consensus $61.6 billion and $1.87) with better PC/DC, and FY25E from $64.6 billion and $2.16 to $74.3 billion and $2.78 (consensus $66.8 billion and $2.51). 

Price Action: INTC shares traded higher by 2.96% at $41.81 on the last check Thursday.