Intel Could Double Revenue Once New Domestic Production Plants Activate

JasonDoiy

Intel Corporation (NASDAQ:INTC) has been a manufacturer of computer hardware chips but had flat growth over the years, as most production was overseas. However, as domestic demand becomes a priority for Intel, they have decided to make significant investments in fabrication plants which should come online in 2025. Based on guidance from the company, this could be the long-term payoff to bring back its renaissance of the internet boom days.

Strong Fundamental Outlooks for 2026

Ratios

All the significant ratios, including quick and cash ratios, were most robust in the last two years. This is likely due to Intel bringing back chip production into the USA.

Unnamed: 0

2017

2018

2019

2020

2021

Period

FY

FY

FY

FY

FY

Current ratio

1.693

1.731

1.400

1.909

2.102

Quick ratio

1.126

1.105

0.932

1.239

1.379

Cash ratio

0.197

0.182

0.188

0.237

0.176

Source: Financial Modelling Prep.

Growth

As Intel had outsourced much of its chip production to Asia, this revenue growth and gross profit growth have been weak over the last five years.

Unnamed: 0

2017

2018

2019

2020

2021

Period

FY

FY

FY

FY

FY

Revenue growth

0.057

0.129

0.016

0.082

0.015

Gross profit growth

0.080

0.119

-0.037

0.035

0.005

Ebitgrowth

0.393

0.300

-0.055

0.075

-0.178

Source: Financial Modelling Prep.

Data

A simple moving average of the last 200 working days showcases the strength of a stock as compared to others, including those in the same sector. Unfortunately, this year has been challenging for many blue-chip companies, including Intel. As one can see, over the last 200 days, the stock returns have been steeply negative. Furthermore, it has been only in the previous 50 working days that the stock has turned positive, with relative weakness in the last 20 working days.

Unnamed: 0

Values

SMA20

1.22%

SMA50

4.10%

SMA200

-24.83%

Source: FinViz

Enterprise

Intel’s stock price has suffered over the last five years, with its highest peak in 2019. Also, the market capitalization has shrunk over the years as well. This is due to all outsourcing production in Asia, where Intel lost a competitive edge against other companies, including direct competitor AMD.

Unnamed: 0

2017

2018

2019

2020

2021

Symbol

INTC

INTC

INTC

INTC

INTC

Stock price

49.980

46.710

65.690

55.440

51.940

Number of shares

4.701 B

4.611 B

4.417 B

4.199 B

4.059 B

Market capitalization

234.956 B

215.380 B

290.153 B

232.793 B

210.824 B

Source: Financial Modelling Prep.

Estimate

Intel is readying production for its new fabrication plants in Ohio. They should be ready by 2025, according to this article.

As one can see, Intel hopes to boost its revenue by 2026 as its new plants go into total production by that time. That should help increase the EPS by three times and the net profit by a relative magnitude of 3x. This is the time to invest in Intel, but if you’re willing to tie up capital for the next four years, that is something you could also do to reap the significant long-term benefit, as Intel should lead up to higher stock prices over the years.

Yearly Estimates

2022

2023

2024

2025

2026

Revenue

63,736

61,908

65,271

62,560

105,699

Dividend

1.52

1.75

Dividend Yield (in %)

4.78 %

4.85 %

5.11 %

5.89 %

EPS

1.97

1.98

2.46

2.06

6.85

P/E Ratio

15.12

15.01

12.07

14.43

4.34

EBITDA

18,794

20,853

24,771

18,202

Net Profit

8,228

7,557

9,690

26,698

Pre-Tax Profit

8,406

9,635

12,262

12,478

31,410

Net Profit (Adjusted)

9,228

6,473

9,871

4,080

Source: BusinessInsider

Technical Analysis Shows Optimal Time for Market Entries

Fibonacci

As one can see, this Fibonacci trendline has reached its bottom, while Intel stock price appears to bounce back. As the price rises from $30 to $50 at the 0,382 Fibonacci level, one might consider market-taking entries here as it will measure roughly a 50% recovery from the high of $65 set last year in 2021.

fibonacci intc

Fibonacci INTC (custom platform)

MACD

Another way to confirm market entry for Intel is when the stock price crosses over the zero line with the MACD line of the lower chart panel. One can already see this has taken place, so entries might be wise to get early returns on this newest price action for Intel.

macd intc

MACD INTC (custom platform)

RSI

As the latest stock price action does take place with Intel, it appears it has nearly reached the overbought RSI market condition. As with previous similar events, the stock price has yet to be thoroughly tested to see if a pullback will occur. To confirm this momentum, one must understand that the fear of missing out has yet to be reached for Intel. Acceleration can easily be determined by overlaying other analytical types, including fundamental over the long term and even artificial intelligence analysis for short-term growth.

ris intc

RIS INTC (custom platform)

Prediction via AI

Monte Carlo

As one can see with the Monte Carlo simulation of data prediction, prediction paths are pointing higher, reflecting the expected Intel stock price increase probability. Moreover, the accompanying normalized distribution chart confirms higher stock price with even some extremely suitable fat tail risk.

monte carlo intc

Monte Carlo INTC (custom platform)

Regression

The red forecasted 30-day regression line shows price action for Intel will be reasonably flat. This might not necessarily be true, but it would help to subdue any potential excitement with this stock as strength builds in an upswing.

regression intc

Regression INTC (custom platform)

Risk Positive With CEO Purchasing Stock

Sustainability

It is hard to assess if a future stock price will be affected by underperforming ratings of a company’s sustainability ranking. As one can see here, for Intel, this is the case. It might hinder Intel’s future stock price growth if action is not taken to improve this. Many institutional investment firms are becoming very active in this as many significant activist pension funds expect investments in only ESG-rated firms with outperformance.

Unnamed: 0

Value

Social score

5.94

Peer count

28

Governance score

6.96

Total esg

17.26

Highest controversy

3

ESG performance

UNDER_PERF

Percentile

16.44

Peer group

Semiconductors

Environment score

4.36

Source: Yahoo Finance

Price Target

During the steep decline in the Intel stock price over the last year, many market analysts set higher, unrealistic price targets that Intel could not meet. However, after the current bottom has been reached with the latest upswing, market analysts have set more realistic price targets, which Intel seems to satisfy. As a result, this can impact Intel’s stock rating to an outperformer as Intel’s stock price meets these targets.

target intc

Target INTC (custom platform)

Source: BusinessInsider

Insiders

Insider Stats

It is exciting to see how executives at Intel are purchasing their stock to show confidence to get a return on their stock options. This also seems to be confirmed, as CEO Patrick Gelsinger repurchased many shares in August.

Unnamed: 0

X

Filing Date

Trading Date

Ticker

Insider

Title

Trade Type

Price

Quantity

Owned

Delta Own

Value

0

nan

2022-11-18 16:14:23

2022-11-16

INTC

Tan Lip Bu

Dir

P – Purchase

$29.49

+50,000

100,500

+99%

+$1,474,365

1

nan

2022-11-09 16:40:02

2022-11-08

INTC

Tan Lip Bu

Dir

P – Purchase

$27.98

+48,146

50,500

>999%

+$1,346,966

2

nan

2022-11-08 16:55:15

2022-11-04

INTC

Tan Lip Bu

Dir

P – Purchase

$27.49

+1,854

2,354

+371%

+$50,975

4

nan

2022-08-25 16:53:36

2022-08-24

INTC

Gelsinger Patrick P

CEO

P – Purchase

$33.86

+14,800

343,746

+4%

+$501,153

Source: Open Insider

Conclusion

Over the last few weeks, Intel has reached a bottom with a bounce to an accelerating uptrend with the stock price. Using various techniques to measure the magnitude of this upswing, it appears short term, but profit could still be made. The fundamentals show moderate growth, with a doubling of revenue by 2027. This is due to investments in fabrication plants in Ohio, as described. This is the time to invest in Intel, but in the short term, it is still a definite buy with long-term returns.