Analyst Lowers Intel's Price Target by 25% on Q2 Guidance Shortfall

Morgan Stanley's Joseph Moore lowered their price target on Intel (NASDAQ: INTC) by 25% from $48 to $36 on 2024/04/26. The analyst maintained their Hold rating on the stock.

Moore's decision to lower the price target comes after assessing Intel's Q1 2024 earnings, which were reported on April 25th. While the Q2 guidance shortfall "was not a big deal," Moore believes that more visibility on server products is needed, as the Intel 3 server roadmap remains the main catalyst. Despite Sierra Forest and Granite Rapids being on schedule, Moore cautioned that they might not be enough to stabilize Intel's market share.

For Q1 2024, Intel reported earnings per share (EPS) of $0.18, beating the Zacks Consensus Estimate of $0.13 by a significant 450%, and surpassing Q1 2023's EPS of $(0.04). The company's revenue for the same period was $12.7 billion, slightly missing the Zacks Consensus Estimate of $12.9 billion but still showing an 8.5% increase from Q1 2023's revenue of $11.7 billion. Intel also achieved a gross margin of 45.1%.

Looking ahead to Q2 2024, Intel's management provided guidance of an EPS of $0.10, revenue ranging from $12.5 billion to $13.5 billion, and a gross margin of 43.5%. CEO Pat Gelsinger expressed confidence in the company's progress, stating, "We are making steady progress against our priorities and delivered a solid quarter."

Following Moore's rating adjustment, other analysts also updated their views on Intel on April 26th. Wells Fargo's Aaron Rakers lowered their price target by 11.6%, from $43 to $38, and maintained their Hold rating on the stock. Wedbush's Matt Bryson reduced their price target by 18.8%, from $40 to $32.5, also maintaining a Hold rating. Evercore ISI Group's Mark Lipacis lowered their price target by 10%, from $40 to $36, while maintaining their Hold rating.

According to data from top-rated analysts, 21.7% currently rate Intel as a Strong Buy or Buy, 65.2% see it as a Hold, and 13% either recommend or strongly recommend selling the stock. The consensus forecast among analysts is that Intel's upcoming year will deliver an EPS of $1.12. If the analysts' predictions are correct, this would represent a 16.8% increase in yearly EPS on a year-over-year basis.

Since Intel's latest quarterly report on April 25th, the stock price has experienced a 9.2% decline. However, on a year-over-year basis, the stock has still seen a 9.7% increase. It is worth noting that during this period, Intel is trailing behind the S&P 500, which has shown a 25.7% increase.

Joseph Moore, the Morgan Stanley analyst who lowered Intel's price target, is ranked in the top 5% of Wall Street analysts by WallStreetZen. With an average return of 12.3% and a win rate of 53.7%, Moore specializes in the Industrials and Technology sectors, among others.

Intel Corporation, headquartered in Santa Clara, California, is a global company engaged in the design, manufacture, and sale of computer products and technologies. The company operates through various segments, including CCG, DCG, IOTG, Mobileye, NSG, PSG, and All Other. Intel offers a range of platform products such as central processing units and chipsets, as well as non-platform or adjacent products including accelerators, boards and systems, connectivity products, graphics, and memory and storage products. The company serves various markets, including retail, industrial, healthcare, cloud service providers, enterprise, government, and communications service providers. Intel also maintains strategic partnerships, such as the one with MILA, to develop and apply advances in artificial intelligence methods for enhancing drug searches.

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