Analysts FINALLY Realize Intel Corporation (INTC) Stock Is a Steal

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Analysts at Northland Securities are the latest to take a more bullish tone on Intel Corporation (INTC) stock … and yet, Wall Street hardly seems to notice.

Analysts FINALLY Realize Intel Corporation (INTC) Stock Is a StealIn fact, Wall Street is entirely apathetic to the price target increase today. INTC stock was off more than 0.5% at the time of this writing, even after Northland boosted its price target on Intel by 17%, from $32 to $37.50.

I understand INTC isn’t necessarily the sexiest name in the stock market today. In fact, as the leading semiconductor player in the declining PC market, Intel is a decidedly unsexy name.

But unsexy stocks aren’t a bad place to look for market-beating returns, which I think Intel is more than capable of delivering.

Here’s why you should consider picking up some INTC stock today:

Northland Isn’t Alone

Increasingly, Wall Street research firms are catching on to Intel’s potential. Before today’s price target increase, Northland upgraded INTC stock from “market perform” to “outperform” back in August. JMP Securities and Bernstein quickly followed suit, hopping aboard the upgrade train just last month.

Now, I’ll be the first one to tell you that analysts aren’t infallible. Far from it. In fact, just yesterday I railed on Morgan Stanley for its idiotic downgrade of GoPro (GPRO) stock, despite growth metrics most companies would kill for and a bargain-bin valuation that has savvy investors foaming at the mouth.

I applaud analysts for being more responsible with respect to INTC stock, which is down more than 11% thus far in 2015. Sure, the PC market is on the decline, but we’ve known that for years.

Altera Acquisition

Intel itself is keenly aware of that weakness, too, which is why it agreed to buy fellow chipmaker Altera Corporation (ALTR) back in June for $16.7 billion in cash. Altera shareholders overwhelmingly approved the acquisition on Tuesday, with 97% of them approving of the sale.

The acquisition will allow INTC to use its existing sales channels to push through new products like Altera’s field-programmable gate arrays, or FPGAs. Unlike Intel’s bread-and-butter microprocessor chips, FPGAs are more customizable chips that customers can tweak more easily to conduct specific tasks of their choosing.

The Altera acquisition is also a strategic defensive move for INTC, which supplies the vast majority of chips in server systems. Recently, ALTR, along with Xilinx (XLNX), have been successfully courting customers with chips of their own aimed at boosting server speed.

That’s not to say that INTC hasn’t been innovating itself recently. In July, Intel and Micron (MU) jointly announced a breakthrough in memory chip technology; the new breed of chip will be as much as 1,000 times faster than existing NAND flash memory chips, the current default component of most mobile devices.

Bottom Line

Taking a look at the stock itself, it’s no wonder research firms like Northland Securities, Bernstein and JMP Securities are noticing Intel’s compelling value. It trades at less than 14 times earnings and boasts a dividend of 3.1% in an era of historically low interest rates.

Go ahead and let the market ignore the signs. INTC is a buy, and in a volatile market like today’s, these types of solid, conservative plays aren’t exactly a dime a dozen.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/10/intel-corporation-intc-stock-analyst-price-target-increase/.

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