Intel may be undervalued, but the 35 analysts following the company give it an rating of hold because of its poor growth indicators. Their target prices range from $17.0 to $45.0 per share, for an average of $28.79. At today's price of $30.3, Intel is trading 5.24% away from its average target price, suggesting there is an analyst consensus of little upside potential for the stock.
Intel Corporation designs, develops, manufactures, markets, and sells computing and related products worldwide. Based in Santa Clara, CA, the large-cap Technology company has 131,900 full time employees. Intel has provided a 4.7% dividend yield over the last 12 months.
Intel has a trailing twelve month P/E ratio of 15.6, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of 1.87, the company has a forward P/E ratio of 16.2.
The average compound growth rate of the company's historical and projected earnings per share is -16.9%. On this basis, the company's PEG ratio is -0.89, which indicates that its shares are overpriced.
On the other hand, the market is potentially undervaluing Intel in terms of its book value because its P/B ratio is 1.2. In comparison, the sector average P/B ratio is 6.23. The company's shares are currently -36.4% below their Graham number, indicating that its shares have a margin of safety.
So why are analysts giving INTC a bad rating? We believe analysts could be alarmed by the company's disappointing -28.2% compounded rate of cash flow growth over the last 4 years. They might also believe that Intel's margins will continue on their downwards trend.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $71,965 | $77,867 | $79,024 | $63,054 |
| Revenue Growth | n/a | 8.2% | 1.49% | -20.21% |
| Gross Margins | 58.6% | 56.0% | 55.4% | 42.6% |
| Gross Margins Growth | n/a | -4.44% | -1.07% | -23.1% |
| Operating Margins | 31.2% | 30.7% | 27.9% | 3.7% |
| Operating Margins Growth | n/a | -1.6% | -9.12% | -86.74% |
| Net Margins | 29.25% | 26.84% | 25.14% | 12.71% |
| Net Margins Growth | n/a | -8.24% | -6.33% | -49.44% |
| Earnings Per Share | $4.71 | $4.94 | $4.86 | $1.94 |
| EPS Growth | n/a | 4.88% | -1.62% | -60.08% |
| Diluted Shares (MM) | 4,473 | 4,232 | 4,090 | 4,171 |
| Free Cash Flow (MM) | $16,932 | $20,931 | $9,662 | -$9,617 |
| FCF Growth | n/a | 23.62% | -53.84% | -199.53% |
| Capital Expenditures (MM) | -$16,213 | -$14,453 | -$20,329 | -$25,050 |
| Net Debt / EBITDA | 0.7 | 0.81 | 0.98 | 1.41 |
