Stifel Raises Intel Price Target to $75

Stifel analyst Ruben Roy raised the price target on Intel (NASDAQ: INTC) to $75.00 (from $65.00) while maintaining a Hold rating.

“INTC delivered better-than-expected results with $13.6bn in revenue $1.4bn above the midpoint of guidance and 41% gross margin 650bps above the guide. Adj-EPS of $0.29 exceeded INTC’s $0.00 guidance.

Revenue upside was driven by volume and pricing as demand continues to significantly outpace supply across all business areas.

Gross margin also benefited on previously reserved inventory sell-through.

Management’s tone was notably more confident given the state of the company turnaround, particularly on 18A yields, which are now ahead of previous internal projections.

While we remain encouraged with INTC’s solid execution over the past few quarters, we continue to believe that gross margin durability is likely to remain uncertain, and improvement from here is not linear.

The valuation reset has been significant, and, we believe, prices in continued execution on several challenging dynamics ahead: continued 18A yield ramps, external foundry customer wins and sustained server CPU momentum.”

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