Chip major Intel (NASDAQ: INTC) was in the spotlight today after it revealed plans to spin off its Programmable Solutions Group (PSG) into a standalone business. Wall Street analysts have varying opinions on the move.
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Top-rated J.P. Morgan analyst Harlan Sur reiterated a Sell on the stock and a price target of $35. The analyst’s price target implies a downside potential of 1.7% at current levels. The analyst sees an eventual initial public offer (IPO) for PSG, potentially valuing it in the range of $20 billion to $25 billion based on AMD’s (AMD) acquisition of Xilinx for $35 billion.
The analyst added that while the company’s team was doing a “solid job” of unlocking value, and the PSG IPO may not happen for the next few years, it still made sense to spin off PSG.
Meanwhile, Northland Securities’ top-rated analyst Gus Richard envisions Intel splitting into four companies including a foundry, two fabless companies, what it owns of Mobileye (MBLY), and an equipment company. The analyst estimates that the sum-of-the-parts valuation is at $56 per share, higher than where Intel’s shares are trading currently.
Richard has a price target of $56 on the stock, implying an upside potential of 57.3% at current levels.
Is Intel a Buy, Sell, or Hold?
Analysts remain sidelined about INTC stock with a Hold consensus rating based on six Buys, 20 Holds, and five Sells.
