More bad news hit for chip stock Intel (INTC) as an analyst cut got the better of it. In fact, the cut that Mizuho analysts dealt was such a blow that Intel dropped to a new five-year low. It bounced back a bit in Tuesday afternoon’s trading, but it is still down fractionally in the wake of the newest cuts.
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Mizuho analysts cut their price target on Intel down from $23 per share to just $21, which saw Intel slide to an intraday low of $18.75 before recovering. For the most part, Mizuho analysts remained neutral overall on Intel, though investors are increasingly concerned about its overall performance. Just following the news for Intel these days provides ample reason for that concern.
But several analysts have also changed their opinions on Intel shares; Northland Securities, for example, slashed its target price nearly in half, going from $42 to $28, but left an Outperform rating in place. But Robert W. Baird analysts, the reports note, hiked the price target from $20 to $25, though keeping it at a Neutral rating. Both Deutsche Bank and Rosenblatt also recently cut price targets on Intel, suggesting a mounting concern.
Brain Drain
A report from The Register suggests that Intel may not have just laid off a lot of high-end talent, but it may be about to lose it from more voluntary attrition. Intel recently lost one of its lead engineers, who jumped ship to go to Qualcomm (QCOM).
Sailesh Kottapalli, a 28-year veteran and Xeon server processor lead, left the company to join one of its newest and biggest rivals. Kottapalli announced the move on LinkedIn, where he declared the move “…a once in a career opportunity that I could not pass on.” Qualcomm’s recent moves to get into server processors have paid off so far, and they may continue to do so, particularly with Kottapalli handling development work for it. The fact that Intel once gave him an Intel Achievement Award for “…record generational performance improvements in a high-end server product” does not hurt either.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 21 Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 58.79% loss in its share price over the past year, the average INTC price target of $24.48 per share implies 28.3% upside potential.
