Mobileye IPO could lead to spinoff

Article Excerpt

INTEL CORP. $47 is a buy. The company (Nasdaq symbol INTC; Manufacturing & Industry sector; Shares outstanding: 4.1 billion; Market cap: $192.7 billion; Dividend yield: 3.3%; Takeover Target Rating: Medium; www.intel.com) has filed the initial paperwork for an initial public offering of its Mobileye subsidiary later this year. It specializes in computer systems and chips for self-driving cars. Intel acquired Israel-based Mobileye in 2017 for $15.7 billion. While it has yet to announce the details of the IPO, other than it will retain a majority stake, the offering could value that business at $50 billion. Mobileye’s revenue jumped 43.3%, to $1.39 billion in 2021 from $967 million in 2020, thanks to rising automobile production following the COVID-19 shutdowns. Earnings also soared 90.9%, to $460 million from $241 million. Intel plans to use the cash from the IPO to fund the construction of $100 billion worth of new chipmaking plants. A successful IPO could also set the stage for more Mobileye share sales, or a full spinoff. Intel is…