INTC: Is Intel Stock Really Set to Soar 40%?

Several analysts are vocally bullish on INTC, but should you buy?

By Alyssa Oursler, InvestorPlace Contributor

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Intel (NASDAQ:INTC) didn’t budge much during this morning’s trading, but it, along with most of the market, has posted a mini-comeback over the course of the last week. Shares have improved more than 10% since bottoming at just over $25 on Aug. 25.

Intel earnings Intel stock INTCThat comeback was compounded by a one-two punch of analyst love today. Northland Capital Markets upgraded Intel stock from “market perform” to “outperform,” reiterating a $32 price target, while Canaccord Equity reiterated its “buy” rating and $39 price target — a level that would represent almost 40% upside for INTC even after the recent recovery.

Analyst news surrounding Intel stock had been mixed before today, with the last three notes including an upgrade, a downgrade and an initiated neutral target — three opinions that arguably cancel each other out.

But there’s promise in the overall consensus. The median price target from the analyst community is $33, which itself is 14% higher than the current price of Intel stock.

Of course, it’s important to note that Intel stock is still sitting more than 20% in the red year-to-date … so that would simply return INTC back to early June levels and still leave it around 15% off its 52-week high.

But in the world of investing, what’s past is past. Right now, the bottom line is that Intel stock has been beaten down dramatically as the broader market and the company’s fundamentals both suffered. Even looking forward, earnings estimates are either flat or declining, while a sales dip is still on tap this year.

But that’s the Intel story we are all well-versed with — a story that’s already been priced in.

Put another way, Intel stock has been beaten down to an extent that investors may be able to pocket a few bucks on a rebound.

Why the Analysts Love Intel Stock Right Now

In fact, that was one of the reasons Northland upgraded shares of INTC stock today in the first place: improving valuation in the face of the selloff.

And yes, I said one of the reasons. Another reason to feel some confidence in Intel stock, despite this year’s suffering, is that within today’s two bullish recommendations alone, analysts cited three distinct factors.

Beyond valuation, Northland also pointed to an improving outlook in the PC market. Meanwhile, Canaccord’s optimism stemmed from last week’s Data Center Day — the company’s first event of its kind. That gave the analysts confidence that Intel will be able to to grow its Data Center Group by a long-term rate of 15% per year — something they believe is not currently factored into the stock price.

The variety in today’s bullish notes alone showcases the double-edged sword of a company with scope like Intel’s. Growth can be hard to come by when you’re an established tech giant — especially when your core market is slowing. But on the flip side, when it comes to new technologies, like those Canaccord cites, INTC’s size offers a built-in footprint and longstanding reputation that could give the company an advantage over smaller competitors.

Combine even a slight recovery in the core market with long-term momentum in a new market, and Intel stock could offer a surprise one-two punch of its own.

With shares moving in the right direction — and already right back at its recent moving averages, which could offer support — there’s reason to think Intel stock may indeed make the analyst consensus a reality.

Alyssa Oursler is based in San Francisco and writes about technology, investing, gender and entrepreneurship. Her work has appeared on Forbes, Business Insider, MSN Money and more. You can follow her on Twitter here or check out her personal site here. As of this writing, she did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/08/intel-stock-intc-soar-40-percent/.

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