© Reuters. Intel stock: a deep value hidden in plain sight?
The past few years have been grueling for Intel (NASDAQ 🙂 stock, which has really lost one step to the competition.
Playing a catch-up game in the tech industry, or not being on the cutting edge of technology, might not be the best place to be as an investor. It should be noted, however, that the Intel stock has modest expectations, with a relatively low bar ahead of it.
Intel has taken steps to keep the company moving forward despite continued pressures from COVID-19. Still, I’m inclined to stay neutral on equities as the competitive landscape looks quite difficult. (See INTC stock charts on TipRanks)
Competitive pressures could really intensify over the next few years as AMD (AMD) continues to gain momentum, while other tech giants, such as Apple (NASDAQ :), choose to ‘abandon Intel processors to create their own.
Without a doubt, the main reason to buy Intel is its cheap multiple. A depressed price-earnings multiple (Intel shares are trading at 12.1 times earnings) doesn’t mean much if there isn’t an ambitious game plan, or a competent management team to implement it. such a plan, however.
Fortunately, Intel’s new CEO Patrick Gelsinger may have what it takes to put Intel back on the cutting edge.
After fluctuating for years around a fairly broad consolidation channel, Intel needs a spark.
The company has a roadmap that could bring the company back to the top as early as 2025. At the end of July, Intel shed light on its plans. It included some pretty innovations that raise eyebrows. Even though Intel can’t regain the lead in four years, it can still close the gap significantly.
When it comes to processors, it looks like a race to the bottom in terms of nanoscale processes. With Apple’s 5nm M1 chips already on the market, Intel’s 10nm chips don’t look too hot.
However, numbers like this don’t tell the whole story. Intel’s 10nm chips still hold up well against AMD’s 7nm chips.
The Taking of Wall Street
According to the consensus rating of analysts at TipRanks, the INTC share is considered blocked. Out of 26 analyst notes, there are nine buys, 10 takes, and seven sells.
The average INTC price target is $ 61.14. Analysts’ price targets range from a low of $ 40 per share to a high of $ 85 per share.
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 path for Intel to get back to where it was: a dominant juggernaut in hardware space.
Whether management can push Intel down this path is a whole other question.
Disclosure: Joey Frenette owned shares of Apple at the time of publication.
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