Tickerlog
Tuesday 5th of April 2022 11:36:26 AM

Intel has come 11% off its low. Is the stock a buy at these levels?

Entrance of The Intel Museum in Silicon Valley. JHVEPhoto/iStock Editorial via Getty Images Intel (NASDAQ:INTC) has faced a difficult 12 months. Since hitting a high early last April, the stock has seen intermittent downward pressure, as the semiconductor maker attempts to navigate a multi-year turnaround. Shares have bounced off a 52-week low lately, climbing 11% off their nadir in mid-March. Has the iconic chipmaker finally become a buy? A Bumpy Transition INTC surged to a 52-week high of $68.49 in the first half of April last year, challenging a peak of $69.29 reached in January of 2020. That level, in turn, represented the stock's peak since its brief, ill-fated spike during the tech and dot-com bubble of the late 1990s and early 2000s. However, shares of the semiconductor maker were unable to sustain their upward momentum. Even as other big-name tech stocks continued to rally through 2021, INTC came under pressure, amid worries the firm had fallen behind the competition. From its peak last April, INTC has dropped about 28%. Meanwhile, Advanced Micro Devices (AMD) has surged about 34%. Even this advance pales in comparison to NVIDIA (NVDA), which has climbed almost 90% over the same time period. Even Taiwan Semiconductor (TSM), which has also struggled, posted a better performance than INTC, falling by about 15% since last April. For comparison, the S&P 500 index has gained about 13% during that period, as you can see from this chart: INTC eventually reached a 52-week low of $43.63 in mid-March. From there, the stock has bounced back lately, trading at $48.62 in intraday action on Tuesday. This represented a rebound of about 11% from its low. INTC's underperformance comes as the company looks to reorient its business. The firm had become over-reliant on PC sales, which have shown signs of weakness in recent years. As part of this, the company has made an investment in new capacity. The firm has announced a plan to spend $88B to build chip manufacturing in Europe over the next 10 years. The plan includes a mega fab in Germany, scheduled to begin pumping out production in 2027. Meanwhile, INTC has taken steps to spin off its autonomous driving unit Mobileye. The company has submitted a confidential draft registration statement with U.S. regulators for a potential initial public offering. While the IPO details were kept private, INTC bought the firm in 2017 for $15.3B. Is INTC a Buy? Given that ongoing transition for INTC, is now a good time to bet on a recovery? Wall Street analysts are skeptical, generally taking a wait-and-see attitude towards the company. Of the 41 analysts surveyed by Seeking Alpha, only 11 have a bullish take on the company -- a little more than a quarter of the total. Meanwhile, double that number (22 analysts) rated INTC as a Hold. Meanwhile, eight analysts give the stock a Sell or Strong Sell rating. Quantitative measures also point to hazy near-term prospects for INTC. Seeking Alpha's Quant Ratings grade the stock as an A- for valuation and an A+ for profitability. However, it receives a C+ for momentum and a lowly F for growth. For a more bullish take on the stock, read an in-depth report from SA contributor SL Investments, who says the firm's turnaround "makes it a buy." Meanwhile, fellow contributor Cory Cramer takes more of a consensus view, saying at today's price, INTC doesn't even represent a good dividend play.
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