Analyst Note| Abhinav Davuluri, CFA |
On Jan. 10, Intel announced it appointed David Zinsner as CFO, thus filling the vacancy created by current CFO George Davis's planned retirement in May 2022. Zinsner has been Micron's CFO since 2018 and has helped the memory supplier greatly improve its balance sheet while maintaining adequate investments in new memory technologies and capacity. We like the move as both Intel and Micron boast capital intensive businesses that require prudent spending and capital allocation, for which we believe Zinsner has demonstrated a penchant. As part of Intel's IDM 2.0 strategy to get its manufacturing back on track, the firm's 2022 capital expenditure is expected to be in the range of $25 billion to $28 billion, and we anticipate further growth thereafter. We think Zinsner is the right CFO to manage this lofty spending budget, as Micron has successfully executed its new technology ramps on an average capex of $9.2 billion over the past four years. We are maintaining our $65 fair value estimate for wide-moat Intel; shares appear undervalued to us and present an attractive buying opportunity for long-term, patient investors.