It has been a pretty counterintuitive day, as a board member at chip stock Intel (INTC) is poised to depart. Despite this departure, Intel shares are up over 2% in Friday afternoon’s trading. Intel recently lost director Lip-Bu Tan, who has been in the semiconductor industry for years. Tan, the former CEO of Cadence Design Systems (CDNS), revealed that “demands on his time” were the key reason for his departure.
He noted that the decision was “a personal decision based on a need to reprioritize various commitments.” Tan also stated that he “…remain[s] supportive of the company and its important work.” This came after Intel’s latest quarterly report, which was a big disappointment, and after a series of cost-cutting measures, including layoffs.
Can Intel Recover?
Thus, the question left on a lot of investors’ minds is whether or not Intel can actually recover. The numbers certainly don’t inspire confidence, as Intel is down over 57% on a year-to-date basis. The good news, however, is that Intel is eager to recapture its lead and has made quite a bit of progress toward that end.
We know about the layoffs and cost cutting. Intel even went so far as to suspend its dividend, a move that will alienate at least some shareholders. This sheer and profound reduction in expenses is likely to generate some returns, though, admittedly, Intel’s foundry ambitions are still pulling cash away from the business.
Is Intel a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 24 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 35.98% loss in its share price over the past year, the average INTC price target of $27.80 per share implies 36.27% upside potential.
