Intel is under market pressure after analyst downgrades and earnings misses

Intel Corporation (NASDAQ: INTC)’s stock price fell 3.6% during Wednesday’s trading session, reaching as low as $20.49 before finishing at $20.56. This fall occurred despite much lower trading activity, with only 32.9 million shares changing hands—66% less than the typical daily volume of 97.7 million.

Wall Street Analysts Respond to Intel’s Struggles:

Several brokerage companies have lately changed their prognosis for Intel, citing worries about its financial performance and strategic direction. Bank of America reaffirmed its “underperform” rating and set a $21.00 price target. Similarly, Stifel Nicolaus lowered its target price from $25.00 to $21.00 while keeping a “hold” rating. Other companies have demonstrated a combination of suspicion and neutrality. Cantor Fitzgerald raised its target price from $22.00 to $29.00, maintaining a “neutral” rating. HSBC Global Research raised Intel’s rating from “moderate sell” to “hold,” but Mizuho reduced its price target from $23.00 to $21.00, retaining a “neutral” outlook. According to MarketBeat.com, five analysts rank Intel as a sell, 27 as a hold, and one as a buy. The average price target among analysts is $26.88, indicating cautious optimism but limited optimism.

Stock performance and key financial indicators:

Intel’s stock is under considerable downward pressure, with a 50-day moving average of $21.28 and a 200-day moving average of $21.82. The company’s current market capitalization is $88.01 billion, with a price-to-earnings (P/E) ratio of -4.64, indicating continued financial difficulties. The company’s liquidity situation comprises a quick ratio of 0.98 and a current ratio of 1.33, while its debt-to-equity ratio is still reasonably low at 0.44. Despite these results, Intel has struggled to produce continuous profit growth.

Institutional investors adjust their positions in Intel:

Hedge funds and institutional investors have also modified their Intel holdings strategically.

• Cornerstone Advisory LLC grew its investment by 4.3% in Q4, totaling 9,863 shares worth $198,000.
• Evergreen Capital Management LLC increased its Intel holdings by 1.0% to 41,904 shares, worth $840,000.
• Dunhill Financial LLC increased its Intel holdings by 22.6% in Q3 to 2,380 shares.
• Federated Hermes Inc. has marginally raised its investment, holding 162,757 shares worth $3.26 million.
• Beaton Management Co. Inc. increased its investment by 2.2%, bringing its total to 23,208 shares.
• Institutional investors now own 64.53% of Intel’s outstanding shares, suggesting significant market activity from institutional investors.

Intel’s Business Outlook and Competitive Position:

Intel is divided into five business segments: Client Computing Group, Data Center and AI, Network and Edge, Mobileye, and Intel Foundry Services. The company’s portfolio includes CPUs, chipsets, SoCs, GPUs, domain-specific accelerators, and memory and storage solutions. The semiconductor behemoth is now under pressure to execute its roadmap, notably, its 18A process technology, which might be a game changer in the foundry industry. Concerns linger about execution risks and rivalry from industry giants like TSMC and AMD.