Often, a change at the helm of a company heralds a transformative period, characterized by greater flux and heightened uncertainty. This is exactly how Cantor Fitzgerald's star analyst, C.J. Muse, describes the state of affairs at Intel at the moment.
To wit, Muse has now reduced his price target for Intel shares from $29 to $20, while maintaining an overall 'Neutral' rating.
To start, Muse correctly points out that Intel's Q1 2025 financial results, which are due next week, constitute the first such event under the nascent leadership of its new CEO, Lip-Bu Tan.
As such, the analyst sees "little change" from his prior expectations, while allowing for "additional aggressive cost-cutting to come over the next quarter and a greater sense of urgency and purpose." Muse goes on to note:
"We expect Intel to post in-line results followed by a miss for the guide as the company takes advantage of a new CEO to reset numbers given recent volatility and macro headwinds."
Of course, with Lip-Bu Tan assuming the apex leadership role at Intel only a few weeks back, and with the added uncertainty emanating from the "recent volatility and macro headwinds," the Cantor Fitzgerald analyst does not expect the company to provide guidance for CY 2025.
For Muse, Intel's bullish catalysts include "further RIFs [reduction in force or downsizing], Intel Foundry Day on April 29th, which will include a keynote by Lip-Bu, as well as any announcement related to a potential JV partnership with potential customers."
Do note that TSMC publicly refused to enter into any JV or technology transfer agreements with other companies, read Intel, on its earnings call last week. This came after reports in recent days indicated that Intel and TSMC had apparently reached an understanding to constitute a JV that would then manage Intel's US-based fabs. The arrangement would have also roped in other chip designers such as Qualcomm, NVIDIA, and Apple. For its part, TSMC would have retained a 20 percent stake in the JV, financed via its in-kind contribution of technology and expertise.
Coming back, do note that Cantor Fitzgerald's fair value target for Intel remains at $26 per share, which implies a 2x multiple on the company's revenues from its products division, plus a $15 billion valuation for Intel Foundry, and another $29 billion in valuation increments materializing from Intel's various investments.
The analyst concludes with the following remarks:
"We think risk/reward remains skewed to the upside. But given the tough slog ahead, we reiterate our Neutral rating."
At the time of writing, Intel shares are down a little over 1 percent in early trading today. So far this year, the stock is down just around 8 percent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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