On Friday, Rosenblatt Securities adjusted its outlook on Intel Corporation (NASDAQ:INTC), reducing the price target to $14 from the previous $18 while keeping a Sell rating on the stock. The semiconductor giant, currently trading at $21.49 with a market capitalization of $93.71 billion, has seen its shares rise over 13% in the past week despite ongoing challenges. According to InvestingPro data, Intel is currently burning through cash rapidly, with negative free cash flow in the last twelve months. The firm’s analysts noted that Intel surpassed earnings estimates similar to the fourth quarter of 2024, attributing the beat to customers stocking up in anticipation of potential tariffs. However, they expressed concern over the demand in the second quarter of 2025, highlighting that Intel’s guidance fell short of the consensus, with expected revenue of $11.8 billion compared to the anticipated $12.8 billion. This guidance comes as Intel’s revenue has declined by 2.08% over the last twelve months to $53.1 billion. Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and analysis tools.
Intel’s Non-GAAP gross margin (GM) is forecasted to drop by 2.7 percentage points quarter-over-quarter to 36.5%, with Non-GAAP earnings per share (EPS) projected to break even, contrary to the consensus estimate of $0.07. The analysts observed that while growth appeared feasible at the start of the year, Intel’s management is now facing an increasingly uncertain economic environment. The company’s current gross margin stands at 34.32%, while InvestingPro analysis indicates analysts expect the company to return to profitability this year, with a forecasted EPS of $0.48 for 2025.
The company’s new CEO, Lip-Bu Tan, has initiated structural changes aimed at streamlining decision-making and prioritizing customer service, as well as reviving Intel’s tradition of innovation. Rosenblatt acknowledged these efforts as potentially beneficial in the long term, assuming they are effectively implemented.
Despite the potential for positive changes under the new leadership, the analysts anticipate Intel will continue to lose market share in the PC and server CPU segments in the near term. As a result, Rosenblatt has revised its revenue and earnings forecasts for 2025 and 2026 downward. The new 12-month price target of $14 is based on 16 times the projected Non-GAAP EPS for fiscal year 2026.
In other recent news, Intel Corporation reported its Q1 2025 earnings, exceeding expectations with earnings per share of $0.13, significantly higher than the forecasted $0.0033. Revenue for the quarter reached $12.7 billion, surpassing the projected $12.25 billion. Despite these positive earnings results, Intel’s stock experienced a decline in aftermarket trading, attributed to broader market concerns and macroeconomic uncertainties. Intel’s new CEO, Lip-Bu Tan, announced plans to cut $2 billion in capital expenditures and streamline operations, aiming to reduce operational expenses to $17 billion by 2025 and $16 billion by 2026. Mizuho Securities adjusted its outlook on Intel by reducing the stock price target from $23.00 to $22.00, maintaining a Neutral rating due to concerns over potential delays in product launches and macroeconomic risks. The company is focusing on AI-driven product development and plans to launch Panther Lake by year-end. Intel provided guidance for Q2 2025, forecasting revenue between $11.2 billion and $12.4 billion, with a gross margin expectation of 36.5%. These developments reflect Intel’s ongoing efforts to navigate economic challenges while investing in future capabilities.
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