BofA Cuts Intel Target On Uncertain Roadmap

Optimism around Intel Corporation INTC is offset by continuing manufacturing headwinds that could lead to loss of market share, according to BofA Securities.

The Intel Analyst: Vivek Arya maintained a Neutral rating for Intel, while lowering the price target from $62 to $55.

The Intel Thesis: While Intel has exposure to multiple positive trends, including cloud, artificial intelligence, 5G, autonomous cars and internet of things, the stock is likely to remain range-bound until its operating model is sorted out, Arya said.

There are two extreme views of Intel: either that it continues to face manufacturing problems that could cost it 40%-50% of its market share or it separates cleanly into a fabless entity, both of which "could prove incorrect."

Arya added that Intel faces unique challenges in outsourcing everything to third party foundries. The company may need to choose a middle path, where its 10-nanometer pipeline and data center and PC market position provides it a cushion through at least 2021.

Arya pointed out, however, that the indecision around manufacturing for 2022 and beyond may prompt customers to shift to Advanced Micro Devices, Inc. AMD.

INTC Price Action: Shares of Intel were trading around $49.24 at the time of publication.

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