Intel Corporation (INTC) — I last recommended INTC stock as the Trade of the Day on Feb. 17, at $28.50 with a trading target of $32. I also said shares made an attractive long-term investment since Intel is positioned to be a big beneficiary of the 5G rollout.
My trading objective was achieved on March 18, returning more than 12% in roughly a month. Long-term investors should continue to hold this quality investment. Shares also appear to offer value for traders once gain following the recent consolidation.
On Wednesday, Wells Fargo reiterated its “Outperform” rating on INTC stock, noting better sales data from laptop computer makers.
S&P Capital IQ Equity Research rates INTC stock a “Buy,” with its analysts saying fundamentals are expected to improve through 2017. While continued declines are expected in the PC segment, they anticipate growth will be driven by the data center segment and the “internet of things.”
Capital IQ has a 12-month price target of $39 on INTC stock, which is based on a peer-average P/E of 15 times its 2017 earnings per share (EPS) estimate of $2.59.
Turning to the chart, we can see that following the March high at almost $33, INTC stock consolidated around its 50-day and 200-day moving averages before breaking below the $30 level in mid-May. The break lower formed the bottom of a cup, which is evolving into a classic bullish cup-and-handle formation.
Since the consolidation may not be over, traders should try to buy INTC stock on a pullback below $31 with a trading target of $37. If successful, this trade will result in a gain of nearly 20%, plus dividends.
Intel currently pays a quarterly dividend of 26 cents per share for a forward annual yield of 3.3%, and its next ex-dividend date is expected in early August.
