Deutsche Bank Resumes Intel at Hold, $23 Price Target

Deutsche Bank analyst Ross Seymore resumes coverage on Intel (NASDAQ: INTC) with a Hold rating and a price target of $23.

“After being restricted, we are resuming coverage of INTC shares with a Hold rating and $23 P/T.

We have confidence in new CEO Lip-Bu Tan’s ability to formulate a transformation strategy that can re-accelerate profitable and sustainable growth, but the execution of this strategy and eventual achievement of these goals will likely be challenging and time consuming.

In the near/medium-terms, we expect macro uncertainties and co-specific headwinds from elevated manufacturing costs (internal & external) and lack of leadership products to continue weighing on INTC’s revenue and profitability.

While INTC has announced several welcome and necessary cost-cutting actions to mitigate these impacts, the path to meaningful EPS/FCF generation remains cloudy and highly dependent on a turnaround in the co’s Foundry business (no small feat).

Over the longer term, should INTC succeed in fixing its manufacturing processes (slower than hoped, but directionally on track), improving its product roadmap (renewed focus, but still years away) and winning a handful of foundry customers, the financial upside can be impressive (DBe EPS of ~$2 in 2027).

We believe Lip-Bu Tan’s technological acumen, customer-centric approach and conservative communication strategy increase the odds of INTC achieving a successful turn-around, albeit with formal details of his vision/strategy TBD.

INTC has clearly stated, there are no quick fixes and we believe patience will still be required.

Consequently, we maintain our Hold rating until learning greater details surrounding the new CEO’s strategic vision and/or seeing more tangible evidence of the company’s turnaround.”

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