Intel declines for third straight day as Citi assesses Gelsinger departure, options

Intel (NASDAQ:INTC) shares fell nearly 5% on Thursday — their third straight day of declines — as investors continued to wonder about the future of the semiconductor giant following Pat Gelsinger’s departure.

Citi analyst Christopher Danely, who has a Neutral rating and $22 price target on Intel, said whoever takes over the top spot at the Santa Clara, Calif.-based company needs three qualifications: “advanced manufacturing experience, technical acumen, and Intel/CPU experience.”

While the early names that have already been bandied about in the press — including former Intel board member Lip Bu Tan and Marvell (MRVL) Chief Executive Mark Murphy — do not have the requisite experience, Danely posited Intel could go back to the proverbial well for the top spot. (Murphy seemed to refute the rumors and said this week that he was “all in” on Marvell.)

“We believe former Intel executive Gregory Bryant could be a decent fit given his Intel experience and some technical acumen,” Danely said.

Bryant, who is currently an executive at Analog Devices (ADI), worked at Intel for nearly a decade in a variety of roles, including leading Intel’s largest segment, its Client Computing Group.

Despite that experience, Danely still believes that Intel should exit the foundry space, which was a pillar of Gelsinger’s strategy for trying to turn the company around.

“If Intel exits foundry, gross margins could rise to the low to mid 50% range and EPS in the $3.00-$4.00 range which could translate to a $50-$60 stock,” Danely wrote.

David Zisner — who is one of Intel’s interim CEOs, along with Michelle Johnston Holthaus — told attendees of this week’s UBS investment conference that Intel’s core strategy remains “intact” and it will stay a company focused on products and foundry.

Separately on Thursday, Intel announced that former ASML (ASML) executive Eric Meurice and Microchip (MCHP) Chairman and interim CEO Steve Sanghi to its board of directors.