Should you buy Intel stock on post earnings weakness?


A day after Intel Corporation (NASDAQ: INTC) reported “catastrophic” results for its fiscal second quarter, a Susquehanna analyst says the stock is not going to recover, at least any time soon.

Intel stock could lose another 10%

Making it worse was the future guidance that also missed estimates by a wide margin and pushed shares down roughly 10% on Friday. Read Intel’s full quarterly report here.

Consequently, Christopher Rolland turned “negative” on the Intel stock this morning and lowered his price target to $33 a share that translates to another 10% downside from here. In a note to clients, he wrote:

For decades, Intel covered up a litany of failed projects, poor acquisitions, and strategic foibles by pushing Moore’s Law and process leadership. Unless they regain this leadership or change strategic direction; growth, profitability, and cash flow problems will persist.

Intel stock is currently trading at a PE multiple of 7.73.

Intel continues to lose market share

The U.S. economy is now in a “technical” recession and the PC market is slowing down. But a bigger problem for Intel, as per Rolland, is that it continues to lose significant chunks of market share to rivals.

For instance, AMD and even ARM continues to steal its share not just in PCs but also in “Servers”; part of which is because Intel continues to face delays in launching new products. Its “Sapphire Roads” has been postponed to the second quarter of 2023, clearing way for AMD’s 5nm Genoa to beat it to market.

On top of that, Apple is pushing for its M-series to completely replace Intel, adding to the long list of challenges before the California-headquartered firm.

Intel stock is now down 35% versus its year-to-date high.

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