Intel - Analysts Are Confused

Intel (INTC) has been a company in turmoil for a while. It's stock price has been stagnant for the better part of a decade and while the company has experienced growth, investors have been asking for far more. I have written about the drab perception that Intel has had for the last decade among the investing public. Although it is hard to quantify, the company's reputation often precedes it when investors think about the company. While this has provided an opportunity for investors to accumulate Intel's shares at a relatively cheap valuation, it would also be nice if the shares would eventually appreciate in price. It seems in many ways that just when investors expect the company to turn a corner, Intel finds another way to disappoint shareholders.

The company did that once again on November 21st when management announced a forecast for zero growth in 2014. Shares had experienced a nice run up the week before, reaching a 5 month high of over $25.25 per share, as Investors eagerly awaited positive news during the company's annual analysts day. But the stock sold off strongly after the negative earnings announcement, and is now trading below $24.

Management, lead by Intel's new CEO, Brian Krzanich, is now aiming for a return to growth in 2015. The surprise announcement came as a bit of a shock to many investors and the analyst community responded with a flurry of downgrades and lowered stock price estimates and earnings forecast adjustments.

The following chart summarizes the latest analyst opinions on Intel. To read the report issued by each analyst, simply click on the analyst's firm link.

Date	Firm	Analyst	Action	Rating	Price Target
Nov 27, 2013	RBC Capital	Doug Freedman	Downgrade	Sec. Perfom	$26
Nov, 22, 2013	Canaccord Genuity	Bobby Burleson	Reiterate	Hold	$22
Nov, 22, 2013	Mizuho Securities	Ruben Roy	Reiterate	Buy	$30
Nov, 22, 2013	Lazard Capital	Daniel Amir	Reiterate	Buy	$30
Nov, 22, 2013	Barclays	Blayne Curtis	Reiterate	Equal Weight	$20
Nov, 22, 2013	Bernstein	Stacy Rasgon	Reiterate	Underperform	$18
Nov, 22, 2013	Goldman	James Covello	Reiterate	Sell	$16
Nov, 22, 2013	Deutsche Bank	Ross Seymore	Reiterate	Buy	$26
Nov, 22, 2013	Citigroup	Glen Yeung	Reiterate	Neutral	$28
Nov, 21, 2013	Jefferies & Co	Mark Lipacis	Reiterate	Buy	$32

As can be seen from the chart above, analysts opinion of Intel is highly scattered. From sell ratings to buy recommendations. From a lofty price target of $32 to lowly expectation of $16 per share, it seems like this opinionated finance crew do not agree on much. And maybe that, in essence, is a reflection of the company itself.

Intel's share price, as can be witnessed in the graph above, has never stayed in the same place for very long, but in the last twelve years, it hasn't really gone anywhere either. From a high of almost $34 in 2003 to a low of $13 in 2009, Intel shares now trade exactly in the middle of both those numbers ($23.50). Just as the stock price cannot seem to decide where to go, analysts, investors, and even management, seem to be just as confused.

The one saving grace for the company might be the safe and relatively high dividend, and the consistently strong share buyback program which has so far retired over $72 billion worth of shares. While Intel might no longer be the growth company it once was, at least it is firmly returning value to shareholders. It's anyone's guess as to whether management will be able to accelerate growth in 2015, but one thing is for sure, shareholders are being paid to wait for the time, if and when it comes, that the shares will finally increase in proportion to growth expectations.

Source: Intel - Analysts Are Confused

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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