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By Sam Boughedda
A Northland Capital Markets analyst maintained an Outperform rating and $55 per share price target on Intel (NASDAQ:INTC) shares Monday, telling investors it is trading below a breakup valuation.
"We believe that Intel's manufacturing capability has significant strategic value to the DoD and will persevere in one form or another," said the analyst. "If Intel continues to stumble, we estimate the breakup value to be $235B or $57 per share."
After falling over 8.5% last week following its earnings report, it has climbed 1.28% so far during Monday's session.
The analyst added that with the de-risked estimates, Intel's strong valuation support, and a 4% dividend, they see "little downside risk and a lot of upside."
"In our opinion, the breakup value of the Company is greater than its current valuation. We value its manufacturing at net PPE of $71B. This puts no value on 50 years of process development," the analyst wrote.
Adding: "Intel has lost a lot of brain cells over the last 20 years, but we believe the core competency, process technology development and manufacturing, still exist."
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