UBS Lowers Intel Price Target to $80

UBS analyst Timothy Arcuri lowered the price target on Intel (NASDAQ: INTC) to $80 (from $100) while maintaining a Neutral rating.

“INTC guided well below even the most bearish investor expectations owing to a much worse than expected PC segment, though this is broadly consistent with MSFT’s commentary from its earnings call last night.

The path to recovery in PC looks challenging given our view that there is no relief in sight for memory pricing/supply – especially given how much server demand is growing for agentic applications.

Having said that, INTC’s actions around capex (we think up at least 50% in C2027, if not more) and adding more substrate capacity for the server business should not really dampen enthusiasm for the growth parts of the story – e.g., foundry (AAPL CPU first big engagement, we think), advanced packaging, server, and ASIC.

When we net it all out, our C2027 estimates of course come down, but we still think ~$3 EPS is doable for C2028 and >$4 for C2029 and the Terafab process technology sharing/relationship (for which we think INTC has to ultimately get a license) adds some optionality – albeit longer-term.

Also, over the longer-term, sustained weakness in the PC business may allow INTC to accelerate its server supply and push its roadmap forward more aggressively, but time will tell on this.

In the meantime, mid to high 20x P/E does not leave much room for multiple expansion so the market probably needs to roll its basis forward to C2029 for the stock to really start to work again.

Net, our PT comes down to $80, and we remain Neutral.”

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