Skip to main content

Market Overview

Nomura Downgrades Intel Following CEO Departure

Share:
Nomura Downgrades Intel Following CEO Departure

Intel Corporation (NASDAQ: INTC) abruptly and unexpectedly saw CEO Brian Krzanich depart last week, and one Wall Street analyst says there's now simply too much uncertainty surrounding Intel for investors to buy the stock.

The Analyst

Nomura analyst Romit Shah downgraded Intel's stock from Buy to Neutral and lowered his price target from $60 to $55.

The Thesis

Intel is losing server share to Advanced Micro Devices, Inc. (NASDAQ: AMD), Shah said in a note, and Intel's stock has simply run out of upside after gaining more than 50 percent in the past year.

“INTC’s multiple started compressing before Mr. Krzanich’s departure; lack of clear leadership will likely only add to the already growing uncertainty about Intel’s long-term outlook,” Shah said in the downgrade note.

In terms of Krzanich’s replacement, Shah said Intel’s product group head Murthy Renduchintala is the most likely candidate. However, Shah said outside hires such as Broadcom Inc (NASDAQ: AVGO)’s Hock Tan or GlobalFoundries’ Sanjay Jha might be better qualified for the position.

Looking ahead, Shah still sees impressive growth numbers from Intel in the next several years. Shah has raised his 2018 and 2019 EPS estimates from $3.85 and $4.33 to $4.16 and $4.40, respectively.

Shah’s $55 price target represents a 12.5 times multiple on that 2019 EPS estimate, in the middle of the stock’s historical earnings multiple range. The stock will likely continue to see downside valuation protection in the 11 times multiple range.

Price Action

Intel traded lower by more than 2 percent Monday morning following the downgrade.

Related Links:

Bernstein Pumps The Brakes On AMD: 'Expectations Have Soared'

What The Latest Steam Gaming Data Means For AMD, Nvidia

Latest Ratings for INTC

DateFirmActionFromTo
May 2021BenchmarkAssumesHold
May 2021KeybancMaintainsOverweight
May 2021Atlantic EquitiesDowngradesNeutralUnderweight

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

 

Related Articles (INTC)

View Comments and Join the Discussion!

Posted-In: Brian Krzanich NomuraAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
SVLake StreetInitiates Coverage On20.0
CLSDJMP SecuritiesMaintains9.0
WPCJP MorganUpgrades88.0
BRKRCleveland ResearchUpgrades
NTRRaymond JamesDowngrades82.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com