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How to shop Intel Stock and its potential 33% upside



Looking at the stock market on Friday, it is difficult to find a stock in red. US stocks are getting pretty lifted by a much stronger than expected job report and several Fed Federal comments from Fed Chair Jerome Powell.

This good news section helps give Intel (INTC) a lift, up 5% to $ 46.75. However, there are some other positives that probably help their rally.

Specifically, analysts from the Bank of America / Merrill Lynch upgraded the shares to a purchase rating and priced $ 60 on the name, representing about 33% up to Wednesday's closing price. While there are still concerns, analysts find that Intel is attractive based on valuation and the potential for generating growth in free cash flow.

Analysts from Morgan Stanley ̵

1; who awarded it a $ 55 price target on December 19 – also had a positive comment Thursday. In particular, they highlighted the company's "attractive exposure to growth trends" in areas such as artificial intelligence, 5G, cloud computing and car.

Those looking at Intel have probably entered their competitors, Nvidia (NVDA) and Advanced Micro Devices AMD. However, unlike AMD and Nvidia, the Intel share has remained relatively good over the past three months. During this range, Intel is down only 4% compared to 35% and 52% respectively in AMD and Nvidia.

The portfolio has also significantly exceeded Nasdaq, which is 16.6% lower than in the same period. [19659002] Part of this force is probably related to Intel's valuation. Although the estimates require declining, but positive growth in 2019, equities trade with only 10 times in this year's earnings. Intel also pays a dividend of 2.6%.

Trading Intel Stock

  A 14-month daily map of Intel (INTC)
A 14-month daily map of Intel (INTC)

Intel shares marked $ 56 at the beginning of June, but fell in a desperate funk for more than four months. The stock finally hit the bottom at the end of October when they closed close to $ 42. Shortly afterwards, however, Intel went higher and spent most of the time cutting between $ 47 and $ 49.

Over the past few weeks, we've seen an increase in Intel's volatility, even though Friday's rally has returned to the bottom of the $ 47 to $ 49 range. Part of that volatility led to a decline in late December, although it did not decline from October. It is important as it allowed Intel to record a higher low, constructive bullish pattern.

On the downside there are also some lower heights, a constructive bearish pattern. It gives us a tightening range (blue lines on the chart) that will eventually force Intel stock to break somehow.

Although Intel can be considered the "safest" of the chip stocks, it has some relatively weak growth. It can make it hard to get $ 60 per share, but if it can hinder the $ 50 mark, a race to its previous heights is surely on the table.


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