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Intel (INTC) stock opened about 15% up on Thursday, March 13 after the struggling chipmaker said industry veteran Lip-Bu Tan will assume the role of chief executive on March 18.
Tan previously served on the board and has most recently served as the chief executive of Cadence Design Systems (CDNS).
Tan’s appointment raises some uncertainty on the future of Intel’s foundry business, given that he reportedly disagreed with former CEO Pat Gelsinger’s plans of spinning it off as a board member.
That said, analysts are broadly bullish on Tan’s appointment as the new chief executive of Intel, shares of which are now up 25% versus their 52-week high.
What Tan’s Appointment Means for Intel Stock
Bank of America analyst Vivek Arya upgraded INTC shares following Tan’s appointment to “Neutral” and raised his price target to $25.
Arya sees Intel stock as worth owning with Tan at the helm, irrespective of what the new CEO chooses to do with the company’s foundry business.
That’s because Lip-Bu Tan is a revered industry expert, knows Intel’s business inside and out (having served as its board member), and most importantly, has demonstrated excellence at CDNS, according to Arya.
Cadence stock outperformed the Philadelphia Semiconductor benchmark by a significant margin under his leadership.
INTC Expects Continued Weakness in Fiscal Q1
Other analysts, including John Vinh of KeyBanc Capital and C.J. Muse of Cantor Fitzgerald also dubbed Tan’s appointment a big positive for Intel stock in their respective reports on Thursday.
Muse reiterated his $29 price target on INTC today, signaling about 22% upside from here.
Analysts are turning positive on Intel stock after the chipmaker hired Lip-Bu Tan as the CEO even though it guided for continued weakness in its current financial quarter.
In January, Intel said it will break even and generate up to $12.7 billion in revenue in its fiscal Q1. Analysts were calling for earnings per share of $0.09 and revenue of $12.87 billion.
Consensus Rating on Intel Shares Remains at ‘Hold’
Despite today’s rally, Intel stock is down nearly 50% from its 52-week high. Still, not everyone is convinced that it will push further up in the coming weeks.
The consensus “Hold” rating on INTC is currently tied to a mean target of $24.24 that’s roughly in line with chip stock’s high on Thursday.
