Market Overview

3 Reasons Why Bernstein Downgraded Intel

3 Reasons Why Bernstein Downgraded Intel
Related INTC
The 5 Things I Look For In A Potential Trade
Apple, Diamondback, Intel, XLU: 'Fast Money' Picks For December 7
US Market Indexes Close Lower Friday (GuruFocus)

Intel Corporation (NASDAQ: INTC) got some love from Wall Street after its most recent quarterly report, but one Wall Street analyst said the software company has too many structural issues for investors to own the stock long-term. 

The Analyst

Bernstein analyst Stacy Rasgon downgraded Intel from Market Perform to Underperform and lowered the price target from $54 to $42.

The Thesis

The unexpected departure of Intel's CEO provides just enough uncertainty for the market to limit upside for the stock, while there are several factors creating potential downside at the moment, Rasgon said in a Tuesday downgrade note. The analyst identified three potentially bearish issues at Intel: 

  • It’s unlikely Intel will revise its guidance higher until its management situation is sorted out.
  • EPS growth will likely slow in 2019, especially as Intel starts to face more difficult comps from 2018.
  • Intel is facing unprecedented competition, which could both weigh on earnings numbers and potentially lead to earnings multiple contraction.

To make matters worse, Rasgon said Intel’s delay in rolling out its 10nm chips means the company will enter a new product cycle without being in the leadership position for the first time.

“Recent data center strength will prove challenging to follow up, with a massive build-out this year that may require digestion, correspondingly tough compares and a competitive environment that looks tougher than it has in many years."

Price Action

Intel stock was trading down 2.15 percent Tuesday morning following the downgrade.

Related Links:

Bank Of America Raises AMD Target On Market Share Optimism

Nomura Downgrades Intel Following CEO Departure

Latest Ratings for INTC

Nov 2018DZ BankDowngradesBuyHold
Oct 2018BMO CapitalMaintainsOutperformOutperform
Oct 2018NomuraMaintainsBuyBuy

View More Analyst Ratings for INTC
View the Latest Analyst Ratings

Posted-In: Bernstein Stacy RasgonAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Best of Benzinga


Related Articles (INTC)

View Comments and Join the Discussion!

Latest Ratings

BAPItau BBAUpgrades274.0
DVNJP MorganDowngrades37.0
EOGJP MorganUpgrades118.0
EXPDGoldman SachsDowngrades68.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Reviewing Bill Ackman's Q1 Trading Activity: Sells Nike and Howard Hughes

Imperial Capital Says Patience Will Pay Off For Discovery Communications Investors