According to Reuters, Germany’s southern state, Bavaria, has turned to Intel (INTC) as it looks to counter chip supply shortages that have derailed production in the automotive sector. Officials are looking to sway the chip giant to establish its proposed European factory in the state.
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The state has already offered the Penzing-Landsberg airbase as a potential site for the proposed semiconductor factory. Intel is seeking up to $9.5 billion in public incentives to establish its factory in the region, reports Reuters. (See Intel stock chart on TipRanks)
“I strongly support this…The possible location of a large international semiconductor manufacturer in Bavaria is an outstanding opportunity,” said Economy Minister Hubert Aiwanger.
Bavaria’s push to have Intel set up base in the state does not come as a surprise, as it is home to luxury carmaker BMW. Additionally, it has suffered from chip shortages which threaten the car manufacturer’s operations. Germany’s economy is also under pressure, given the slowdown in the auto industry.
The EU is pushing for the creation of an alliance of semiconductor companies in the region and sees an alliance as averting the risk of reliance on foreign semiconductor companies.
Citigroup analyst Christopher Danely recently reiterated a Hold rating on the stock with a $65 price target, implying 16.76% upside potential to current levels. According to the analyst, a month-over-month decline in May notebook shipments represents a negative data point. The analyst views the decline as more “bad news” for the chip giant.
Consensus among analysts is a Hold based on 12 Buys, 11 Holds, and 8 Sells. The Intel average analyst price target of $66.31 implies 19.11% upside potential to current levels.
INTC scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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