What Do Analysts Think About Intel After Tower Semiconductor Deal - Intel (NASDAQ:INTC)

Analysts had mixed views on Intel Corp INTC after yesterday's reports about Intel nearing a deal to acquire Tower Semiconductor Ltd TSEM for $6 billion.
Northland analyst Gus Richard said such a deal would "make a lot of sense" and be a good one for Intel shareholders based on his estimate that it would cost $13 billion -$15 billion to replace the Tower foundry network.
Intel "failed the last time it tried to become a foundry," and it needs to learn how to work with foundry customers, develop process design kits, expand its IP portfolio, and develop a broader breadth of process technology. Tower "possesses all of these capabilities," argues Richard.
He kept an Outperform rating and $62 price target (30.3% upside) on Intel before it confirmed to acquire Tower for $53 per share in cash, representing a total enterprise value of $5.4 billion.
Intel's January notebook shipments were down 24% month-over-month, well below Citi's expectation of down 16%, mainly due to component supply constraints, Citi analyst Christopher Danely tells investors in a research note.
The analyst sees this as "another red flag" after Intel stated it saw an inventory correction in the notebook end market during its last earnings call.
He believes PC sales "will cool off" in 2022 due to a reversion to the mean after two straight years of double-digit growth.
Danely reiterated a Neutral rating on the shares with a $55 price target (15.6% upside).
Price Action: INTC shares traded lower by 0.19% at $48.35 in the premarket on the last check Wednesday.

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