BofA Securities has reaffirmed its Underperform rating on Intel Corporation (NASDAQ: INTC), maintaining a $40.00 price target which contrasts with the current trading price of approximately $54.32, close to the stock's 52-week peak of $54.60.
The investment firm underscores a disparity between Intel's market valuation and its demonstrated ability to sustain a competitive and profitable business model. Supporting this stance, analysis from InvestingPro reveals that Intel’s stock exhibits signs of being overbought, as indicated by its relative strength index (RSI), alongside an exceptionally high price-to-earnings (P/E) ratio nearing 1200.
While recognizing Intel's leadership in advanced semiconductor manufacturing technologies, BofA voices reservations regarding the company’s yield performance at the current 18-angstrom (18A) node. Moreover, there is skepticism about Intel’s capacity to flawlessly execute manufacturing processes for external customers at the more technologically advanced 14-angstrom (14A) node.
The firm also points out that even a successful ramp-up of external foundry business, potentially generating several billion dollars in revenue, would exert only a modest influence against Intel’s substantial revenue base, which InvestingPro reports at $53.44 billion over the trailing twelve months.
Forecasting Intel's growth, BofA anticipates annual sales increases between 3% and 7% over the next three years, inclusive of projected external foundry revenues of $2 billion in 2027 and $4 billion in 2028. Their $40 price target is predicated on an unchanged 3.5x enterprise value-to-sales (EV/S) multiple applied to 2027 revenue estimates, aligning with InvestingPro’s fair value estimation that suggests the current stock price is inflated.
Intel's recent quarterly report for Q4 2025 showcased a robust performance that surpassed expectations. Earnings per share (EPS) hit $0.15, significantly above the forecasted $0.08, and revenue totaled $13.7 billion, exceeding the predicted $13.41 billion. Despite this strong quarter, Intel issued guidance forecasting an 11% sequential drop in revenue for Q1 2026.
Reflecting a nuanced view of Intel’s prospects, Deutsche Bank responded by raising its price target to $45 from $35 while maintaining a Hold rating. Conversely, KeyBanc increased its price target to $65 from $60 and upheld an Overweight rating, buoyed by an optimistic outlook on Intel’s foundry segment. KeyBanc noted particularly strong demand in Intel’s server CPU market and a 15% quarter-over-quarter growth in the Data Center and Artificial Intelligence (AI) segment.
These varied analyst perspectives underscore a degree of market uncertainty regarding Intel’s future, balancing strong recent operational results with caution about growth sustainability and manufacturing execution risks.