Many tech stocks sank in the light gloom that was the equity market on Monday. One exception was that chipmaking mainstay, Intel (INTC -1.63%). The company's share price saw an uptick of just under 1%, thanks to an analyst's modest yet still positive price target adjustment. By comparison, the uninspired S&P 500 index sagged by 0.2% on the day.
A raise in price target, but not recommendation
Before market open, UBS' Timothy Arcuri made the change. He added $4 per share to his Intel price target for a new level of $50. That doesn't put him in the bull camp for the veteran tech company, however; in making the move, he left his neutral recommendation on the stock unchanged.
Arcuri's adjustment is due to a change in financial reporting Intel recently announced that affects its Intel Foundry manufacturing business. This will better reflect what the company believes is the "foundry-like relationship" between the unit and Intel Products -- the goods it sells.
The analyst wrote that by running the numbers according to this new regime, "we are taking a slightly more positive view of Intel Foundry's revenue and margin potential."
Concerns about competitiveness
The key word there is "slightly," however. Arcuri said that he's keeping his neutral stance on Intel because of its "flagging" positions in crucial growth segments. He singled out artificial intelligence (AI) as being one of the areas in which the company is lagging behind.
Although the UBS prognosticator is tepid on Intel's prospects, for the most part his peers are expecting decent growth in the near future. On average, according to data compiled by Yahoo! Finance, they are anticipating a 14% annual rise in revenue this year, accompanied by a sturdy 28% increase in per-share net income. Those figures should land at 12% and a meaty 67% in 2025.
