The sign outside of Intel’s headquarters in Santa Clara, California was pictured on January 30, 2023. The photo was taken by David Paul Morris for Bloomberg and Getty Images. Intel’s shares declined by 8% on the following Wednesday after the company released its much-anticipated financial results for its semiconductor manufacturing, also known as foundry, business. These revealed an operating loss of $7 billion for the year 2023.
This was the first occasion that Intel presented revenue figures specifically for its foundry division, thereby separating it from the product business, whose operating income in 2023 amounted to $11.3 billion. On Tuesday, Intel announced that it anticipates its foundry deficits to hit their peak in 2024, and to reach break-even point midway between the present quarter and the end of 2030.
Analysts at Cantor Fitzgerald retained their neutral rating and $50 price target for the stock. They commended Intel for its revamped financial reporting structure, but also noted that the company needs to enhance its foundry and product operating margins. These analysts stated in a note to investors from Tuesday that the real work starts now. They added that it would take time, especially considering Intel’s intended manufacturing leadership is set to truly ramp up in 2027.
Meanwhile, Stifel’s analysts said they continue to view Intel’s strategic plans in a positive light in a note from Tuesday. They reconfirmed a hold rating and a target price of $45 on the stock. They said that despite a multi-year execution cycle still being ahead, they continue to prefer near-term AI beneficiaries NVDA and AMD. The report was contributed to by CNBC’s Kif Leswing.
Intel shares witnessed an 8% drop after the company revealed its operating losses of $7 billion in 2023 for the semiconductor manufacturing sector or the ‘foundry’ business. This was the first time that Intel had declared revenue nuances for its foundry business, distinguishing it from its products business that reported an operating income of $11.3 billion in 2023. Industry insiders and market watchers believe that Intel’s losses will reach their peak in 2024 and will break even somewhere midway between the current quarter and the end of the fiscal year 2030. Cantor Fitzgerald has maintained a neutral rating and a $50 price target on the shares, praising the company’s new financial reporting structure but hinting that Intel needs to work on driving its margins for foundry and product operations. At this critical juncture, Stifel analysts have reiterated a “hold” rating and a target price of $45 on the stock. As the chipmaker gears up for a multi-year execution cycle, its plans and strategies will have a bearing on the market and its position amongst competitors.
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