Bank of America Reiterates Underperform on Intel, $40 Price Target

BofA Securities analyst Vivek Arya reiterated an Underperform rating and $40.00 price target on Intel (NASDAQ: INTC).

“We reiterate our Underperform rating and $40 PO since in our view the stock is well ahead of Intel’s (INTC) capability to deliver a competitive/profitable business model.

We appreciate the scarcity value of leading-edge manufacturing, but if INTC cannot deliver the right manufacturing yield for its own products at current-gen 18A node, it may not be able to promise flawless execution to external customers at the more advanced 14A process in a foundry market where INTC has no scale or history of execution.

Even if INTC were to get a few $bn of external revenue, it’s unlikely to move the needle in a business that is doing $50bn in sales currently.

All-in, we model sales growth of 3-7% annually for the next 3 years, including $2bn/$4bn in external foundry sales in CY27/28E.

Keep $40 PO on unchanged 3.5x CY27E EV/S.”

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