In a report released today, Timothy Arcuri from UBS maintained a Hold rating on Intel, with a price target of $40.00.
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Timothy Arcuri has given his Hold rating due to a combination of factors impacting Intel’s financial outlook. The company is making progress with its 18A technology, which is crucial for improving gross margins, particularly in the foundry segment. However, the yields need to continue improving through 2026 and beyond to realize significant benefits. While Intel is indirectly benefiting from AI demand, the external foundry efforts on 14A are expected to require more investment and may take time to yield results.
Despite positive momentum and potential external investments, Intel’s earnings per share (EPS) support remains limited at current levels. The EPS power is not expected to exceed $1 until 2028, partly due to profit-sharing with third parties from previous financing agreements. Additionally, while foundry losses may improve with 18A, the server and desktop business roadmaps are not robust enough to capitalize fully on 18A’s value, affecting Intel’s overall margins. As a result, despite liking the company’s narrative, the valuation is balanced by an increased share count, maintaining the price target at $40.
Arcuri covers the Technology sector, focusing on stocks such as Nvidia, Micron, and Intel. According to TipRanks, Arcuri has an average return of 35.3% and a 74.01% success rate on recommended stocks.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $35.00 price target.