Intel's P/E Multiple Has Been In The Range of 7.1x And 18.1x Over The Last 15 Years.
Intel's P/E Multiple
Intel's P/E Multiple grew from 13.8x in 2004 to 18.1 in 2009.This can be attributed to better than expected earnings announcement in a period of recession. The company also announced its plan to invest $7 billion on new semiconductor plants in the U.S. However, the P/E Multiple slipped to as low as 7.1 in 2011, as the company announced few acquisitions with total value of over $9 billion, including that of McAfee and Infineon. Between 2011 and 2017, Intel largely saw P/E Multiple expansion from 7.1x to 16.9x. Several good things happened for Intel in this period. Intel announced a $20 billion share buyback.It moved its focus on data centers, and cloud computing. Penetration of Intel powered wearables increased globally.It acquired Altera for $17billion; Altera was the leader in field programmable gate array chips, which make chips customizable for specific tasks, making them faster and more energy-efficient.However, the company saw its P/E Multiple contract to 10.4x in 2018, as Intel lost market share in both PC/notebooks and data center business to AMD, which saw strong growth led by its EPYC and Ryzen processors.