03:48 PM EDT, 09/06/2024 (MT Newswires) -- Intel ( INTC ) is exploring a partial sale of Mobileye (MBLY) according to Bloomberg, which could significantly affect its financials, given Mobileye's $10 billion market capitalization compared with the chipmaker's $24 billion net debt, UBS said in a note Friday.

Despite potential losses, Intel's ( INTC ) Mobileye sale aligns with its strategy to divest assets, including PSG, as it considers splitting its foundry and product businesses, the investment firm said.

Intel ( INTC ) can reduce its stake in Mobileye to 80% with minimal tax implications, but further reductions could be taxable, highlighting the urgency of its financial strategy, UBS said.

The company's recent earnings guidance implies significant near-term challenges, with Intel ( INTC ) expected to experience margin pressures due to competitive pricing and inventory management, UBS analysts said.

UBS said it remains cautious on Intel's ( INTC ) recovery timeline, with growth prospects largely dependent on Intel's ( INTC ) ability to capitalize on cost-saving initiatives, asset sales, and the realignment of its business strategy.

UBS has a neutral rating on Intel ( INTC ) with a $32 price target.

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