Analysts Maintain Neutral Stance on Intel Ahead of Earnings Report

Intel is preparing to announce its second-quarter financial results after markets close on Thursday, as analysts remain cautious about the company's outlook. All 11 analysts tracked by Visible Alpha have issued "hold" ratings for Intel shares, with a consensus price target of around $22, slightly below the stock's recent closing price of just over $23.

Investor attention is focused on Intel's foundry division, where new CEO Lip-Bu Tan is reportedly considering changes to the contract chipmaking business. Such a shift could result in significant write-offs of chipmaking technology, potentially amounting to hundreds of millions or even billions of dollars. The move is seen as an effort to attract major clients such as Nvidia and Apple. UBS analysts noted that this could signal "the first step in a hard pivot away from foundry and towards the product business," describing the strategy as potentially sound but "operationally challenging." UBS added, "We have indicated 'light' at the end of the tunnel, but it is a long tunnel and we remain on the sidelines."

Analysts expect Intel's quarterly revenue to fall 7% year-over-year to $11.93 billion, with adjusted net income projected at $76.3 million, or 2 cents per share. Revenue from the foundry division is also anticipated to decline by 7% to $3.98 billion. Meanwhile, Intel has reportedly begun laying off thousands of workers in Oregon as part of previously announced restructuring measures. Price targets from major firms remain neutral, with UBS raising its target to $25, Wedbush maintaining $19, and HSBC holding at $22.