A downbeat new take on the company from an analyst was only the latest blow to its share price.
Onetime investor favorite Intel (INTC -1.39%) took another in a series of hits on Tuesday, with an analyst’s new and more bearish take on its prospects.
Already beaten down in price, Intel’s shares sagged by 1.4% on the day. This compared unfavorably to the slightly over 1% gain of the S&P 500 index it’s a part of.
Recommendation chop
That researcher was Argus’ Jim Kelleher, who now feels Intel is only a hold. Prior to that, Kelleher’s recommendation on the chipmaker was buy.
The analyst’s take comes less than a week after the once-dominant tech company published its second-quarter earnings. It missed on both the top and bottom lines, a dynamic compounded by guidance that was well short of prognosticator projections.
In his new analyst note on Intel, Kelleher expressed a number of concerns about its business. He pointed out that it continues to post heavy losses in its efforts to build up its manufacturing in the U.S., and it has to contend with “pressure from all sides” in the data center segment, among other challenges. For these reasons, he feels the company will post low-profit quarters (or even no-profit ones) across the coming few years.
The company’s salad days were years ago
It certainly feels like the right time to get more bearish on Intel, as the landscape of the chipmaking industry has changed, and the company hasn’t changed fast enough to keep up. Where it was once a leader, now it feels very much like a follower — and one that’s lagging well behind the pack. Therefore, even at its beaten-down price, Intel doesn’t seem like the stock of a company with a bright future.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy.