Bank of America Analysts Downgrade Intel Stock to Underperform After Disappointing Q2 Report - What Does This Mean for Your Investments?
In a recent turn of events, Bank of America analysts have downgraded Intel (NASDAQ:) stock from Neutral to Underperform following the chipmaker's lackluster Q2 results. This move comes after Intel's shares plummeted more than 20% in Friday's premarket trading session.
The company's Q2 report fell short of expectations, with adjusted earnings of $0.02 per share on revenue of $12.83 billion, missing Wall Street estimates. Additionally, Intel forecasted an adjusted loss for Q3 and announced a suspension of its dividend, set to begin in Q4.
Analysts cited a weak Q3 outlook, profitability challenges, and concerns about Intel's ability to compete with focused rivals like NVIDIA Corporation (NASDAQ:), Advanced Micro Devices, Inc. (NASDAQ:), and Taiwan Semiconductor Manufacturing Company (TSM). The lack of competitive AI accelerators and significant cost-cutting measures, including a 15% reduction in headcount, also contributed to the downgrade.
As a result, analysts have slashed their earnings per share (EPS) forecasts for Intel for the fiscal years 2024, 2025, and 2026. The price objective (PO) for Intel's stock has also been lowered to $23 from $35.
HSBC analysts have also downgraded Intel stock to Reduce from Hold, highlighting concerns about margin misses and disappointing guidance.
In conclusion, the downgrade of Intel stock reflects challenges in the company's business outlook and competition landscape. Investors should carefully consider these factors when evaluating their investment portfolios and long-term financial goals.
