‘It’s not an earnings release, it’s a crime scene’: Analysts and social media react to Intel’s bad quarter.
“We’ve written the phrase ‘Worst earnings report in our history for this company’ more than once in the past few years. But this time we REALLY mean it…”
That’s the comment from a team of analysts at Bernstein, led by Stacy Rasgon, and an example of shock waves rippling in the investment landscape after the chipmaker delivers the worst results in 20 years and a grim forecast.
shares are poised to open nearly 10% lower at $27.20. A year ago, they traded around $50.
Rasgon, who cut his price target from $23 to $20 a share and kept it underperforming, didn’t pay attention to the company’s first-quarter outlook, calling it “amazingly bad even against low expectations, with sales and gross margins falling.”
Opinion: Intel just had its worst year since the dot-com boom and it won’t get any better soon
Intel forecast an adjusted loss of 15 cents a share for the current quarter against expectations it would earn 25 cents and said revenue would fall further to $10.5 billion, compared with expectations. was $13.93 billion, as the company warned of a shrinking data center market and a pile of inventory.
“It was not an earnings release. It’s the crime scene,” the Twitter user commented. wasteland capitalwho added some colorful reactions to the company’s results released late Thursday:
Charlie Bilellodirector of market strategy at CPI Wealth, used a chart to visualize the company’s 32% decline in fourth-quarter revenue on a historical basis:
JPMorgan analysts led by Harlan Sur have reduced their price target to $28 a share, from $32 previously, as they expect the weakness to spread to end-market segments other than Intel’s needs for PCs and data centers/enterprises. The bank rated Intel as “underweight”.
“Overall, given the increasing competitive pressure the company is facing in the client/server computing space combined with a poor track record of technology/product execution excellence, we believe that This will be a challenging road ahead for Intel as the company navigates a difficult macro environment and works to close the performance gap with rival AMD.
” Sur and a team wrote in a note to the client.
Warning investors to stay away from this stock, Stephanie Link, director of investment strategy and portfolio management at Hightower Advisors, said on Twitter that Intel is “one of the value traps out there.” . She highlighted a 1,200 basis point drop in annualized margins and another 480 basis point decline expected in the next quarter. “This is more than a cyclical industry downturn,” Harlan said.
Some pointed to Intel’s dividend, saying it’s time the company could cut that dividend. It paid a cash dividend of $0.36 for each quarter of last year and has faithfully paid dividends each quarter. since 2013and paid $1.5 billion in dividends in the fourth quarter.
This is Take a closer look at Intel’s dividend math.
Cowen analysts were almost speechless when they titled their study: “Can’t really think of a title to describe that, but here’s the note anyway.”
“The first six months of 2023 may be the bottom, but how quickly and to what extent will business activity and profit and loss recover in the face of competitive pressure and the investments required to turn it around? A long road ahead,” said a team led by Matthew Ramsay, who reduced their price target to $26 a share from $31 previously, keeping the market’s active rating unchanged. .
Bernstein’s Rasgon, for example, isn’t so sure: “We kept wondering when things would turn out to be the worst that could happen for Intel. And we continue to be surprised.