![]() Intel Corp. stock continued to struggle Tuesday morning in the wake of an abrupt CEO departure, after a Bernstein Research analyst downgraded the stock and said Brian Krzanich’s exit was emblematic of larger problems at the chip maker. Intel INTC, -2.17% stock fell more than 1% in early trading Tuesday, and have declined 5.1% through Monday’s close since Krzanich resigned Thursday morning. Bernstein analyst Stacy Rasgon downgraded the stock to underperform Tuesday, less than two months after abandoning his previous bearish position in the wake of Intel’s April earnings report. “Frankly, we have been regretting that upgrade; not necessarily from the perspective of the stock, but rather that it is becoming increasingly apparent that the structural issues we have promulgated for years are becoming ever obvious to investors,” Rasgon wrote. “And now, we believe uncertainty around the CEO change provides an opening, limiting upside risk if numbers continue to move up for the time being, while these structural issues grow more visible.” Don’t miss: Intel must do something it has never done after inglorious exit for CEO While Rasgon admits that Intel’s financial performance is stellar at the moment, he sees danger in management of operating expenses, capital expenditures, working capital and growth coming from “less-attractive markets.” He said he understands those who short Intel stock, as the CEO change could depress potential for gains in the near-term until earnings are pressured next year amid increased competition from the likes of Nvidia Corp. NVDA, +0.58% and Advanced Micro Devices Inc. AMD, +1.17% “Overall we believe the structural elements of the short case are becoming more apparent, and the abrupt CEO change can cushion upside risk if numbers drift up in the near term (with the potential for a sharp break if and when issues begin impacting numbers),” Rasgon wrote. In an emailed statement, an Intel spokeswoman pointed to Intel’s opportunity in servers and leadership in the CPU arena to combat Bernstein’s doubts. “While we are prepared for a more competitive environment as we move through 2018, we’ve already factored that into our financial forecast and we’re in a great position to compete,” Intel said. “We remain very confident in our products, our roadmap and our competitive position.” Rasgon brought down his price target to $42 from $54 despite the increased forecast Intel included with the news of Krzanich’s departure. He said that he believes Intel numbers will be strong through the second half due to strong sales of server chips. Most analysts increased their target prices in the wake of Krzanich’s departure and the updated forecast that was released Thursday, though Rasgon is the third analyst tracked by FactSet to downgrade the stock since the change. At least 18 analysts have increased their targets since Krzanich resigned, while at least five have moved them the other way. Opinion: Intel has a golden opportunity as CEO Brian Krzanich leaves company Overall, Rasgon is one of only four analysts who consider Intel the equivalent of a sell, with 25 of 39 analysts tracked by FactSet rating the stock the equivalent of a buy and 10 calling it a hold. The average price target Tuesday morning was $50.18, about 19% higher than the going rates. Intel stock is up 8.6% so far this year, while the Dow Jones Industrial Average DJIA, +0.18% — which counts Intel as a component — has declined 1.9% and the S&P 500 index SPX, +0.19% has gained 1.6%. Read More Intel stock falls after Bernstein says shorts have a good case : https://ift.tt/2KjORJL
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January 2020
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