Bloomberg / Getty Images
Key Takeaways
- Intel shares plunged Friday after the company's quarterly revenue forecast missed analysts' expectations.
- Jefferies analysts said they plan to "sit on the sidelines" while new CEO Lip-Bu Tan's turnaround plan develops.
- Bank of America’s analysts believe Tan has taken the “right steps,” including reducing Intel’s workforce size to cut costs.
Intel (INTC) shares tumbled Friday after the company’s quarterly forecast missed expectations, despite stronger-than-expected results for the first quarter.
The stock has fallen by about 7%, to $19.98. It has lost over one-third of its value in just the past year. (Read Investopedia’s live coverage of today’s market action here.)
Jefferies said there are “not many bright spots” to point out for the struggling chips maker, which is moving ahead with a turnaround led by CEO Lip Bu Tan who took over in march. Analysts said that it will take Lip-Bu a long time to stamp his mark on INTC. They added, “we’ll sit on the sidelines” until we have a clearer vision of the turnaround. Jefferies kept its “hold rating” and $23 target price for the stock.
Tan said Thursday that “there are no quick fixes,” and that he is "taking swift actions to drive better execution and operational efficiency," including plans to further trim Intel's ranks.
Bank of America analysts believe that the new CEO of the company is taking “the right actions.” The large size of the company, its unprofitable foundry, and the strong competition from Nvidia (NVDA), Advanced Micro Devices, (AMD), “makes it harder to turn things around within the next few years,” the analysts said. The bank maintained its “neutral rating” and $23 target but lowered its earnings forecasts for 2025 and 2020.
Citi and Wedbush analysts both issued neutral ratings and set price targets of $21 each.
