Intel Corporation (INTC, Financial) has unveiled strategic measures aimed at enhancing operational efficiency and execution. The company plans to simplify its organizational structure by cutting management layers, facilitating swifter decision-making processes, and emphasizing engineering talent empowerment.
As part of these reforms, Intel has revised its financial targets. The company aims to reduce its non-GAAP operating expenses to roughly $17 billion by 2025, a decrease from the earlier target of $17.5 billion. In the following year, 2026, the company targets a reduction to $16 billion. These expenses encompass research and development, as well as marketing, general, and administrative costs.
Intel is also set to incur restructuring charges connected to this reorganization, although the exact figures and their impact on non-GAAP results have not yet been determined. Consequently, these charges are not factored into the current guidance.
Additionally, through improved use of construction-in-progress assets and heightened operational efficiencies, Intel plans to lower its gross capital expenditures to $18 billion in 2025, down from the previous projection of $20 billion. Despite this reduction, the company anticipates net capital expenditures to be approximately between $8 billion and $11 billion.
Intel emphasizes its continued commitment to investing in core business areas while driving operational efficiency and creating an easier business environment for its customers.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 31 analysts, the average target price for Intel Corp (INTC, Financial) is $22.18 with a high estimate of $31.00 and a low estimate of $17.70. The average target implies an upside of 3.35% from the current price of $21.46. More detailed estimate data can be found on the Intel Corp (INTC) Forecast page.
Based on the consensus recommendation from 46 brokerage firms, Intel Corp's (INTC, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Intel Corp (INTC, Financial) in one year is $26.95, suggesting a upside of 25.58% from the current price of $21.46. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Intel Corp (INTC) Summary page.
INTC Key Business Developments
Release Date: January 30, 2025
- Q4 Revenue: $14.3 billion, up 7% sequentially.
- Q4 Non-GAAP Gross Margin: 42.1%, 260 basis points ahead of guidance.
- Q4 Earnings Per Share (EPS): $0.13, versus guidance of $0.12.
- Q4 Operating Cash Flow: $3.2 billion.
- Q4 Adjusted Free Cash Flow: Negative $1.5 billion.
- Full Year 2024 Revenue: $53.1 billion, down 2.1% year over year.
- Full Year 2024 Gross Margin: 36%, down 760 basis points.
- Full Year 2024 EPS: Minus $0.13.
- Full Year 2024 Cash from Operations: $8.3 billion.
- Full Year 2024 Adjusted Free Cash Flow: Minus $2.2 billion.
- Q1 2025 Revenue Guidance: $11.7 billion to $12.7 billion.
- Q1 2025 Gross Margin Guidance: Approximately 36%.
- Q1 2025 EPS Guidance: Breakeven on a non-GAAP basis.
- Intel Foundry Q4 Revenue: $4.5 billion, up 3% sequentially.
- Intel Foundry Q4 Operating Loss: $2.3 billion.
- Mobileye Q4 Revenue: $490 million, up 1% sequentially.
- Altera Q4 Revenue: $429 million, up 4% sequentially.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intel Corp (INTC, Financial) delivered revenue, gross margin, and EPS above guidance for Q4 2024.
- The company achieved key grant-related milestones, supporting solid upside to gross margins.
- Intel Corp (INTC) remains a market leader in AI PC CPUs, with plans to ship over 100 million systems by the end of 2025.
- The launch of Panther Lake on Intel 18A is on track for the second half of 2025, showcasing progress in performance and yield.
- Intel Foundry has made good progress with Intel 18A, showing competitive offerings and a healthy RFQ pipeline of potential customers.
Negative Points
- Intel Corp (INTC) faces increased competition in the AI PC category, impacting market dynamics.
- The company is not yet participating meaningfully in the cloud-based AI data center market.
- Intel Foundry reported a significant operating loss of over $13 billion in 2024, with negative gross margins.
- Q1 2025 guidance indicates a sequential revenue decline of 11% to 18%, reflecting macro uncertainty and seasonality.
- Intel Products' gross margins are expected to be under pressure throughout 2025 due to product mix and cost structure.
