Intel (NASDAQ: INTC) has seen a positive sentiment shift amongst institutional analysts over the past few months. Since the stocks fall during the pandemic, Intel has bounced back strongly providing strong returns for long term shareholders.INTC stock has since gained 24% over the past year of trading. The bulls are now focusing on the bigger picture as financials look to rebound in 2024 and beyond. This article will breakdown Intel’s stock forecast for 2022 and beyond.
Analysts stock forecasts for Intel in 2022
Analysts and price forecasts
Firstly, price targets amongst analysts remain modestly bullish. Intel is currently trading at $62 a share. Amongst 39 Wallstreet analysts, the average 12 month price target is at $63.84 a share. However, for targets only released in 2021 – the mean target is sitting around $70 a share suggesting an improvement in analyst sentiment. Some of the following targets released in the last month include:
3/24/2021 JP Morgan & Chase – analyst Harlan Sur set the 12 month price target to $80 a share. This suggests an upside of 29% from the current trading price. Harlan Sur is well known in covering the technology sector, focusing on stocks such as Advanced Micro Devices.
3/24/2021 Wells Fargo – analysts at the institution have raised their 12 month price target from $60 to $70 a share. This suggests an upside of 12% from the current trading price. Wells Fargo currently have an equal weight rating on the stock.
Financial breakdown of Intel stock
Revenue performance and forecasts
The surge in demand for computers and other computing goods during the pandemic saw Intel’s financials jump to new heights. For example, revenue for Q2 2020 climbed to all-time highs of $23.661 billion, respectively. In its most recent quarter (Q4 2020) the company generated $20 Billion in revenue which was $2.6 Billion above the guidance provided in October. However, This marked an annual revenue of $77.9 Billion for Intel in 2020, its best performance to date.
While the rapid expansion in revenue may excite investors, analysts are confident the annual revenue will remain stable at $72 Billion throughout 2021/22. However, its worth noting analysts expect EPS and revenue to return to all-time highs in 2024, and to continue rise thereafter. By 2024, Intel expects the data-centric market opportunity to reach $230 Billion by 2024. The company expects to absorb this growth and drive stronger revenue performance.
Intel’s Return on Equity
Moreover, another attractive part of Intel’s financials is its growing Return on Equity (ROE). Intel’s current ROE is 26%. The general rule of thumb is that ROE above 20% is solid, which Intel satisfies. Not to mention, Intel is far above the industry average of 11%. It is worth noting that Intel maintains a high ROE while debt is declining. Essentially, Intel is not using debt to artificially inflate ROE, which is positive for fundamental investors. Moreover, analysts are projecting Intel’s ROE to dip but still remain high at 22.2% in three years.
Intel plans to invest $20 Billion
Recently, CEO Pat Gelsinger announced Intels bold new strategy to invest $20 billion in two new US chipmaking facilities. The strategy aims to reiterate Intels leading position in the semi-conductor industry. The “IDM 2.0” strategy includes the internal scaling of its manufacturing, alongside expanded use of third party foundries to manufacturer Intels products and building a world class foundry business. So what does this strategy look like for Intel?
The $20 Billion investment will go towards building two new factories in Arizona to assist with its expansive scaling objectives.
“We are excited to be partnering with the state of Arizona and the Biden administration on incentives that spur this type of domestic investment.” said Gelsinger
Before I begin, I remind our viewers that this is not financial advice. Instead, the information above is an investment commentary from extensive research.
In conclusion, the general consensus amongst analysts remains slightly bullish with price targets from JP Morgan and Wells Fargo above the current trading price. However, as discussed revenue is expected to plateau in 2021, which may disappoint investors in comparison to its 2020 revenue growth. In contrast, the growth in computers and computing good sales should only continue to rise in the future.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Senior Manager, Patrick McLoughlin
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