Intel Corporation (INTC) Down Despite A Price Target Increase

Intel LogoBy The original uploader was VD64992 at English Wikipedia [Public domain], via Wikimedia Commons

Intel Corporation (NASDAQ:INTC) shares were down Tuesday even though they received a price target increase to $37 from $35 by Pacific Crest. The price target hike is based on Intel’s quarterly Asia supply chain findings, which left the analysts incrementally more positive on the chip maker.

“Lean PC inventory levels, above-seasonal Q3 demand outlook prompt higher estimates on INTC,” the analysts state.

Intel done with clearing inventory phase

Pacific Crest also noted that for the third fiscal quarter of the year, the chip maker is seeing “above seasonal demand.” The analysts maintained their Overweight rating on the stock. According to Barron’s, BlueFin Research Partners, an equity research firm tracking Intel’s shipments of “process materials,” concluded the same thing.

“Intel has completed a phase of clearing inventory,” the research firm states.

In June, the chip maker’s production was up 5%-6%, the research firm reports. Intel’s exiting the quarter with increased production suggests it is done with depleting inventories after the “significant WIP build in Q2,” notes BlueFin. The research firm is already seeing signs of improvement for PC shipments in July.

BlueFin expects a pickup in the Data Center Group in the back half of the year along with waning concerns about further PC deterioration. The research firm expects investments at such levels to reward investors.

Diversifying operations

Intel’s recent move to work with Mobileye, an advanced auto safety systems manufacturer, on developing driverless technology for BMW is seen as a positive for investors. Such a move will help the chip maker diversify its operations and hedge against the rising PC market risk.

Last week, RBC Capital reiterated its $33 price target on the chip maker with a Sector Weight rating. Analyst Amit Daryanani noted that the project involves a lot of work and that each of the parties involved will commit 100 employees for the project. Even Intel will allot several hundred of its employees and invest millions of dollars every year.

The chip maker has yet to reveal the type and number of processors it will be utilizing for the project. The analyst noted that Intel is expected to generate $57 billion revenue in this year. In comparison, the contribution from autonomous vehicles will be immaterial.

On Tuesday, Intel shares closed down 0.21% at $32.68. Year to date, the stock is down almost 7%, while in the last year, it is up almost 7%. The stock has a 52-week high of $35.59 and a 52-week low of $24.87.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at

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