Instinet, Citi Analysts Positive On Intel Corp. (INTC)

Intel (NASDAQ:INTC) shares and sentiments have taken a beating after the flaws in its chips made headlines. Intel tried to push out patches along with OS providers Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) that slowed down machines.

To make matters worse, CEO Brian Krzanich sold a sizeable amount of shares that further increased fears that the gravity of the matter was being played down. As a result, the shares have taken a beating. But last week saw something of a reversal in sentiments as two veteran analysts published notes that the shares are in fact worth buying.

Analysts Positive on Intel

Analysts at Instinet Research raised their price target on Intel shares from $50 to $60 based on its strength in the data center. "This shift in customer mix [to cloud and communication service providers] has been dramatic, setting Intel up for better revenue growth," says the report quoted by Marketwatch. So Intel is expected to "easily surpass segment guidance of high-single-digit growth" on the back of the 20% growth it saw in Q4.

A Citibank analyst reiterated his Buy rating on Intel and named it the top semiconductor stock for 2018 (similar to Micron in 2017 when it appreciated 90%). The optimism is based on the resumption in spending by enterprises as reported by other companies.

Given Intel’s greater exposure to the space, this should benefit it even more than the others. The low sentiment on the stock coupled with this growth potential makes for solid upside potential, the analyst says.

Another point noted in the media is Intel’s institutional support. As sentiments on the stock remain low, institutions have continued to buy and currently hold about 70% of the shares.

A class action lawsuit has commenced at the U.S. District Court for the Central District of California on behalf of investors who purchased Intel shares between Jul 27, 2017 and Jan 4, 2018. The complaint is about the company issuing materially false and misleading statements and/or failing to disclose that: (1) there is a fundamental design flaw in Intel's processor chips as they contain a feature that makes them vulnerable to hacking; (2) updates to fix the problems in Intel's processor chips could cause Intel chips to operate 5-30% more slowly; and (3) consequently, Defendants' public statements were materially false and misleading at all relevant times.

Intel shares carry a Zacks Rank #2 (Buy). Intel peers worth buying include NVIDIA Corp. (NASDAQ:NVDA) which has a Zacks Rank #1 (Strong Buy), or Texas Instruments (NASDAQ:TXN) , which has a Zacks Rank #2. Or, you can also take a look at the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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