Intel Corp. won. suggestion for replacing his boss as multiple analysts updated the chip giant’s stock.
Shares of Intel INTC,
up 5.1% in trading Thursday morning, picking up 7.0% gains from Wednesday’s session after the company announced that VMware Inc. VMW,
CEO Pat Gelsinger would take over Intel’s lead role.
Intel has suffered in recent years with a series of misrepresentations that have led the company to lose its leadership in process technology. Even though analysts seemed to agree that there is no quick response to the company’s current challenges, they are hopeful that Intel has Gelsinger’s technology knowledge and decades of prior experience making it well-suited to the problems they face.
“With 30 years at Intel, including the post of Chief Technology Officer, then a successful term at VMware, it brings more relevant knowledge to the specific requirements of Intel’s work than any other candidate,” wrote Morgan Stanley analyst , John Moore.
He raised the stock to fat from equal weight and raised his price target to $ 70 from $ 60 in a note Thursday morning titled: “There is no quick fix, but with Gelsinger, light has end of the tunnel. ”
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BMO Capital Markets analyst Ambrish Srivastava had the same opinion. “We have seen time and time again how the right person at the helm can influence change,” he wrote. “While we don’t expect major near-term changes, the wealth of experience Pat Gelsinger brings from his previous tenure at Intel as well as the experience he gained running VMware, we believe he is the man right that can deal with the fear, but Intel does not face inevitable challenges. “
Srivastava developed Intel stock to outperform market performance and raised its price target to $ 70 from $ 50, arguing that “even a few step-by-step steps should be a tool for shares. ”At the same time, it knocked down shares of rival Advanced Micro Devices Inc. AMD,
shares so as not to outperform market performance, writing that while AMD has performed quite recently, it appears that its shares have also benefited from Intel’s weak performance.
Another update came from Cowen & Co. analyst Matthew Ramsay, who wrote about Intel’s “reformed balance” that “an Intel-grown technologist” is now back to lead the company.
“It is difficult to confirm the importance of Mr. Gelsinger’s hiring, not only to Intel, but to the U.S. technology / semiconductor industry,” he said in a note to clients. “After years of letting his manufacturing leadership falter, we have long argued that the technologist’s leader needed our technological problems to solve his technological problems … and found sinn sin. “
In Ramsay’s view, the appointment suggests “a renewed focus on the 7-nanometer and 5-nanometer roadmaps that are critical to Intel’s turnaround and U.S. technology leadership. ”Ramsay raised its rating on Intel stock to outperform market performance and increased its price target to $ 75 from $ 50.
Of the 38 analysts surveyed by FactSet that cover Intel stock, 13 have a buy rating, 16 have a rating, and nine have sales, with an average price target of $ 57.03.
Intel shares have gained 11.2% over the past three months as the Dow Jones industrial average DJIA,
increased 9.4%.