Intel shares fell 27.46% to $66.79 by publication time on Friday, despite upbeat third-quarter results. Analysts lowered price targets after Intel issued a weaker-than-expected fourth-quarter outlook.
Seaport Research Partners analyst Jay Goldberg changed Intel's rating from Buy to Neutral. Goldberg said Intel projected fourth-quarter revenue of $15 billion to $16 billion, compared with consensus expectations of $17.3 billion. Goldberg said Intel forecast pro forma earnings of 22 cents per share, substantially below expectations. Goldberg said Intel attributed the shortfall to substrate supply constraints, but Goldberg was unconvinced that those constraints explained the central problem. Goldberg argued that Intel was producing too many client wafers for a PC market experiencing the worst slump in more than a decade. Goldberg said Intel was producing too few server CPUs for the rapidly expanding AI market.
KeyBanc Capital Markets analyst John Vinh kept an Overweight rating and reduced Intel's price target from $155 to $140. Vinh said third-quarter revenue reached $16.5 billion, below the $16.6 billion consensus. Vinh said earnings reached 52 cents per share, exceeding market expectations of 41 cents per share. Vinh said management's fourth-quarter revenue and earnings forecasts fell substantially below expectations. Vinh said management projected PC revenue would contract by more than 20%, leaving the forecast more than $2 billion below expectations. Vinh said Intel expected the memory-related PC correction to persist at least through the first half of 2027.
DA Davidson analyst Gil Luria retained a Neutral rating and lowered Intel's price target from $100 to $70. Luria said total revenue increased 21% from a year earlier and 2.4% from the preceding quarter. Luria said Foundry and Data Center delivered strong growth. However, Luria described substantial weakness in Client Computing. Luria said Client Computing revenue fell 5% from a year earlier and 8% from the preceding quarter, missing consensus estimates by 9%. Luria attributed the decline to customers cutting inventories in response to weaker end-customer demand.
Cantor Fitzgerald analyst C.J. Muse retained a Neutral rating and reduced Intel's price target from $125 to $90. Muse said consensus estimates were falling substantially following Intel's outlook. Muse said the outlook reflected memory constraints hurting PC trends and wafer and substrate shortages restricting server shipments. Muse also cited a tragedy at Intel's manufacturing facility in Israel that was reducing output and gross margins. Muse said a PC market contraction had been expected. However, Muse said current DRAM pricing implied a 45% year-on-year decline in PC units, a significant surprise. Muse also highlighted Intel losing server market share to Advanced Micro Devices and guidance indicating negative free cash flow through 2027.
Rosenblatt Securities analyst Kevin Cassidy retained a Sell rating and reduced Intel's price target from $80 to $70. Cassidy said non-GAAP earnings of 52 cents per share surpassed market expectations of 41 cents per share. Cassidy said Intel forecast fourth-quarter non-GAAP gross margin of 38.0% and earnings of 25 cents per share, both below expectations. Cassidy said the forecast incorporated approximately $300 million in revenue pressure and 200 basis points of gross margin pressure from the Fab 28 disruption in Israel.
Intel Analysts Cut Price Targets Amid Q3 Manufacturing Misallocation
BenzingaShare
Summary
Price action in Intel stock took a hit as analysts trimmed price targets following a weak Q4 outlook tied to manufacturing imbalances. Seaport’s Jay Goldberg downgraded to Neutral, flagging overproduction of client wafers and underproduction of server CPUs, which hurt the risk-to-reward ratio for investors. KeyBanc’s John Vinh cut his target to $140 from $155, pointing to PC revenue falling more than 20%. DA Davidson’s Gil Luria slashed his target to $70 from $100, citing a 5% revenue drop in Client Computing. Cantor’s C.J. Muse lowered his to $90 due to memory and wafer issues, while Rosenblatt’s Kevin Cassidy reduced his to $70 after Fab 28 disruption.
Source:Show original
Disclaimer: The information on this page may have been obtained from third parties and does not necessarily reflect the views or opinions of KuCoin. This content is provided for general informational purposes only, without any representation or warranty of any kind, nor shall it be construed as financial or investment advice. KuCoin shall not be liable for any errors or omissions, or for any outcomes resulting from the use of this information.
Investments in digital assets can be risky. Please carefully evaluate the risks of a product and your risk tolerance based on your own financial circumstances. For more information, please refer to our Terms of Use and Risk Disclosure.