Intel Stock: Deep Value Hidden in Plain Sight?

imageStock Markets40 minutes ago (Sep 22, 2021 12:31PM ET)

(C) Reuters. Intel Stock: Deep Value Hidden in Plain Sight?

It’s been a gruelling past few years for Intel (NASDAQ:INTC) stock, which really lost a step to the competition.

Playing a game of catch-up in the technology industry, or not being on the absolute cutting-edge, may not be the best place to be as an investor. It is worth noting, however, that Intel stock has modest expectations priced in, with a relatively low bar ahead of it.

Intel has made moves to keep the company moving forward amid continued COVID-19 pressures. Still, I’m inclined to remain neutral on shares, as the competitive landscape looks quite harsh. (See INTC stock charts on TipRanks)

Competitive pressures could really pick up over the coming years, as AMD (AMD) continues to gain momentum, while other tech giants, such as Apple (NASDAQ:AAPL), opt to ditch Intel CPUs to build their own.

Undoubtedly, the main reason to scoop up Intel is for its dirt-cheap multiple. A depressed price-to-earnings multiple (Intel shares trade at 12.1 times trailing earnings) doesn’t mean much if there’s no ambitious game plan, or a competent management team to pull off such a plan, though.

Fortunately, new Intel CEO Patrick Gelsinger may have what it takes to get Intel back to the cutting edge.

Intel’s Plan

After fluctuating for years around a fairly wide channel of consolidation, Intel needs a spark.

The company has a roadmap that could bring the company back to the top as soon as 2025. In late July, Intel shed more light on its plans. It included some pretty eyebrow-raising innovations. Even if Intel can’t re-gain the lead in four years, it can still close the gap in a big way.

When it comes to CPUs, it seems like a race to the bottom in terms of the nanometer process. With Apple’s 5nm M1 chips already on the market, Intel’s 10nm chips don’t look too hot.

However, such numbers don’t tell the whole story. Intel’s 10nm chips still hold up well against AMD’s 7nm chips.

Wall Street’s Take

According to TipRanks’ consensus analyst rating, INTC stock comes in as a Hold. Out of 26 analyst ratings, there are nine Buys, 10 Holds, and seven Sells.

The average INTC price target is $61.14. Analyst price targets range from a low of $40 per share, to a high of $85 per share.

Bottom Line

With a 2.6% dividend yield, Intel is one of those contrarian value stocks that will reward investors for their patience.

With a compelling roadmap, there is a pathway for Intel to get back to where it was: a dominant behemoth in the hardware space.

Whether management can push Intel to walk that path is another question entirely.

Disclosure: Joey Frenette owned shares of Apple at the time of publication.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Intel Stock: Deep Value Hidden in Plain Sight?


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