Shares of Intel Corp (NASDAQ:INTC) tanked in early trading on Friday, despite the company’s upbeat third-quarter results. Here are some key analyst takeaways:
- Seaport Research Partners analyst Jay Goldberg downgraded the rating from Buy to Neutral.
- KeyBanc Capital Markets analyst John Vinh reaffirmed an Overweight rating, while slashing the price target from $155 to $140.
- DA Davidson analyst Gil Luria reiterated a Neutral rating, while reducing the price target from $100 to $70.
- Cantor Fitzgerald analyst C.J. Muse maintained a Neutral rating, while cutting the price target from $125 to $90.
- Rosenblatt Securities analyst Kevin Cassidy reiterated a Sell rating, while trimming the price target from $80 to $70.
Check out other analyst stock ratings.
Seaport Research Partners: Intel’s fourth-quarter guidance came below expectations, Goldberg said in his downgrade note. The company projected revenue of $15-$16 billion, below consensus of $17.3 billion, with pro forma earnings of 22 cents per share, well below expectations of 45 per share, he added.
"Intel cited supply constraints, around substrates, for the miss, but they did not convince us this was the heart of the problem," the analyst wrote. The company is overproducing client wafers for a PC market in its worst slump in over a decade, while underproducing server CPUs for the booming AI market, he added.
KeyBanc Capital Markets: Intel reported revenues of $16.5 billion, missing consensus of $16.6 billion, and earnings of 52 cents per share, coming above Street expectations of 41 cents per share, Vihn. Management’s revenue and earnings guidance for the fourth quarter missed expectations meaningfully, he added.
Management guided to a more than 20% contraction in PC revenues, which came over $2 billion short of expectations, the analyst stated. Intel expects the memory-induced PC correction to continue at least through the first half of 2027, he further noted.
DA Davidson: Intel’s total revenues grew 21% year-on-year and 2.4% sequentially, Luria said. While the company’s results showed strong growth in the Foundry and Data Center segments, the Client Computing segment exhibited "significant weakness," he added.
Client Computing revenues declined by 5% year-on-year and 8% sequentially, coming in 9% below consensus estimates, the analyst stated. "The decline was driven by customers reducing inventories to adjust for lower end customer demand," he further wrote.
Cantor Fitzgerald: FollowingIntel’s outlook, the consensus estimates are "moving materially lower," Muse said. He added that the outlook reflected:
- Memory constraints weighing on PC trends
- Wafer and substrate shortages weighing on server shipments
- Tragedy at Intel’s Israel-based fab weighing on output and gross margins
While the PC market contraction was expected, current DRAM pricing implied a 45% year-on-year decline in PC units, which came as a "meaningful surprise," the analyst stated. He further highlighted the loss of market share to Advanced Micro Devices Inc (NASDAQ: AMD in servers and free cash flow guided negatively through 2027.
Rosenblatt Securities: Intel’s non-GAAP earnings of 52 cents per share exceeded Street expectations of 41 cents per share, Cassidy said.
The company guided to non-GAAP gross margin of 38.0% and earnings of 25 cents per share for the fourth quarter, which were below expectations, the analyst stated. The guide includes approximately $300 million in revenue and 200 basis points (bps) of gross margin pressure from the Fab 28 disruption in Israel, he added.
INTL Price Action: Shares of Intel had declined by 27.46% to $66.79 at the time of publication on Friday.
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