Deutsche Bank Raises Intel Price Target to $100

Deutsche Bank analyst Ross Seymore raised the price target on Intel to $100.00 while maintaining a Hold rating.

“Over the past ~month, reports of Intel’s Foundry business gaining customer traction have become much more frequent (see WSJ report on INTC/Apple on 5/8 and ZDNet Korea report on Intel/SK Hynix today), yielding a strong tailwind for INTC shares (+100% in last month).

While back-end, advanced packaging-based partnerships can yield “billions” of incremental revenue, we believe front-end deals are more interesting due to their potential size, profitability and endorsement of Intel having fixed its wafer manufacturing process.

To this end, we wanted to share our qualitative and quantitative views on the potential Intel/Apple partnership.

While details have yet to be announced/confirmed, we believe Intel becoming the foundry for a subset of this M-series generates ~$2b in annual revenue for Intel Foundry.

While this is a sizable revenue, the actual earnings accretion of these assumptions remains hazy given the likely volatility around pricing, yields, capex required, etc., as Intel continues to ramp its foundry process.

Additionally, our model already includes Intel generating external foundry revenue of ~$2b in 2027 and ~$4b in 2028 (conceptually inclusive of ramps like for Apple) in order to achieve the company’s target of operating break-even exiting 2027.

This external foundry ramp and achievement of break-even OM% are the primary drivers of our EPS ests being ~+10% above consensus in 2027 & 2028.

We believe the potential good news is more than adequately reflected in Intel’s current share price.

Therefore, we maintain our Hold rating but raise P/T to $100 (based on ~20x the high-end of our upwardly revised LT EPS power of ~$4-5.”

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