Since the beginning of the year, INTC share price is up by 14%. Is it worth buying?

Intel Corporation (NASDAQ: INTC) is one of the world's largest chipmakers. It designs and manufactures microprocessors for the global personal computer and data center markets. 

Key business segments: computer (54% of revenue in Q1), data centers (28%), memory solutions (5.6%).

Investors were not pleased with the report for the first quarter. Results in the data center segment were weak again. The forecasts for the second quarter of 2021 did not please analysts. EPS baseline forecast for 12 months is negative (-12%). In the long term, earnings per share are expected to increase by 5.4% on average per year.

Cash and equivalents on the balance sheet of the enterprise are $ 22.4 billion with total assets of $ 150.6 billion.

Debt load is low - the debt/equity ratio is 46.4%, with a conditionally borderline level of 70% and 74% median for the group of comparable companies.

Intel Corporation has a dividend yield of 2.43% with a dividend per share of $ 1.39 and a payout ratio of 26.00%. The company regularly holds buybacks.

 

Pros:

Unlike its competitors, Intel does not outsource manufacturing to Asia. This reduces the risks from geopolitics.

The shortage of semiconductors in the market has increased capex and led to technological change.

Dividends and buybacks.

 

Cons:

High competition. Intel is currently working on a 7nm process technology, while TSMC is already producing 5nm and working on 3nm.

Apple is gradually moving away from Intel solutions and is working on its own M processors based on ARM architecture.

The shortage of semiconductors in the market forces chip makers to have lost profits. 

The median target of analysts for Intel is $63.71 at the current quotation of $56.03 (data as of Thursday, 07/01/2021). This implies about 13.75% upside potential from current levels for 12 months.

Intel's range of support level starts at $55.56, the last area is at the price of $54.57 per share. All calculations are based on pivot points technical analysis.

In Finscreener ranking INTC gets 3 and half stars.

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Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.