Intel’s Strategic Refocus: Hold Rating Amid NEX Sale Consideration and Foundry Exit

Citi analyst Christopher Danely maintained a Hold rating on Intel (INTC – Research Report) yesterday and set a price target of $21.00.

Christopher Danely has given his Hold rating due to a combination of factors affecting Intel’s business strategy and financial performance. One of the primary reasons is Intel’s consideration to sell its Networking and Edge (NEX) segment, which has seen a decline in sales and operates with lower margins compared to its core CPU business. Danely agrees with the potential sale of most of the NEX segment but suggests retaining the embedded segment due to its higher margins and synergies with Intel’s core operations.
Additionally, Danely expresses a preference for Intel to exit the merchant foundry business, which has been experiencing mounting losses. This strategic refocusing on core competencies like CPUs is seen as beneficial for Intel’s long-term performance. Despite these considerations, the overall financial outlook and market conditions lead Danely to maintain a Neutral rating with a target price of $21.00, reflecting a cautious stance on Intel’s stock performance.

In another report released yesterday, Deutsche Bank also upgraded the stock to a Hold with a $23.00 price target.