Evercore ISI has revised its price forecast for Intel Corporation (NASDAQ: INTC) upwards to $45.00, an increase from the previous target of $41.10. Nonetheless, the firm maintains an 'In Line' rating on the stock, which continues to trade notably higher around $54.32, indicating an overvaluation when measured against its estimated intrinsic worth. Following the release of quarterly results and projections for the upcoming first quarter, Intel's shares experienced an 11% drop in after-hours trading, reflecting investor reaction to earnings that were mixed and forward guidance somewhat below seasonal norms due to internal supply limitations.
The stock's recent pullback follows a substantial rally, as data points to a 151.83% total return over the preceding year and a 15.67% increase just in the last week. Evercore ISI highlighted several promising operational achievements within Intel's recent performance metrics. Progress in the development of its 14A and 18A semiconductor process technologies was noted. Additionally, there was a remarkable 50% year-over-year increase in revenues from custom application-specific integrated circuits (ASICs), pushing the stream above the $1 billion annual run rate. The Data Center and Artificial Intelligence (DCAI) segment also saw a 15% rise in revenues, marking a decade-high performance despite ongoing supply chain challenges.
Further contributing to the optimism, Evercore ISI raised revenue expectations for Intel’s advanced packaging unit, which is now anticipated to exceed $1 billion, up from prior projections of just over $100 million. The projection for Intel’s adjusted free cash flow is also upbeat, forecasting a $3.1 billion positive swing in the second half of 2025, contrasting with an estimated loss of $4.7 billion in the first half.
However, despite these positive indicators, the research firm cautions that Intel’s valuation presents a challenge. Intel’s current price-to-earnings ratio stands at an extraordinary 1200, and its enterprise value to EBITDA multiple is 27.15, underscoring a stretched valuation scenario. Evercore ISI assesses Intel’s risk-reward profile as balanced, considering forthcoming execution improvements and potential benefits arising from geopolitical factors, weighed against the lengthy competitive race to attract foundry clients and close the transistor performance gap at the 14A node.
Complementing these insights, Intel recently reported its fourth-quarter 2025 earnings, posting earnings per share (EPS) of $0.15, surpassing analyst predictions of $0.08. Revenues amounted to $13.7 billion, exceeding expectations set at $13.41 billion. Nevertheless, guidance for the first quarter of 2026 anticipates an 11% decline in revenue quarter-over-quarter, signaling ongoing operational headwinds.
Market analysts continue to diverge in their outlooks. Deutsche Bank elevated its price target to $45 from $35 while retaining a Hold rating, describing Intel’s quarterly results as "solid." Similarly, KeyBanc increased its price target to $65 from $60, maintaining an Overweight rating, driven by positive outlooks for Intel’s growing foundry operations and persistent demand within the server CPU market. On the other hand, BofA Securities sustained its Underperform rating and $40 price target, expressing caution that Intel’s stock price might be outstripping the company’s capabilities to establish a competitively advantageous and profitable model.
Intel's financial trajectory and market valuation generate a mixture of cautious optimism and skepticism among investors and analysts. The mixed sentiments underscore the complexity of assessing a technology giant negotiating rapid innovation cycles, supply disruptions, and significant valuation premiums. Interested parties may consider detailed analytic resources that delve deeper into Intel’s prospects and more than 1,400 additional stocks for comprehensive investment decision-making.
Evercore ISI has increased its price target on Intel Corporation to $45 from $41.10, retaining an 'In Line' rating despite the stock trading considerably above this level. The adjustment follows Intel's mixed quarterly results, where supply chain issues dampened first-quarter guidance. While the stock experienced a sharp after-hours decline, the company reports strong revenue growth in custom ASICs, advanced packaging, and adjusted free cash flow improvements projected for late 2025. Analyst opinions diverge, highlighting both encouraging developments and risks tied to valuation and execution timelines.
Key Points
- Evercore ISI increased Intel's price target to $45 from $41.10, maintaining an 'In Line' rating while noting the stock is overvalued relative to its current price.
- Intel's quarterly results showed strong revenue growth in custom ASICs and advanced packaging but faced challenges from supply constraints affecting near-term guidance.
- Analyst opinions vary, with some raising price targets due to optimistic foundry and server CPU demand, while others caution on valuation levels and competitive execution timelines.
Risks
- Intel's high valuation ratios, including a P/E of 1200 and EV/EBITDA of 27.15, pose risk relative to fundamental earnings capacity, impacting investor sentiment in technology and semiconductor sectors.
- Supply chain constraints limit Intel's ability to meet seasonal expectations for the upcoming quarter, creating uncertainty in revenue and profitability forecasts affecting power and technology markets.
- The multi-year effort required to close the performance gap in transistor technology and attract foundry customers introduces execution risk amid competitive pressures in the semiconductor and manufacturing industries.