The cyclical nature of companies can bring even former giants in the world of technology to their knees. As of late, the Intel Corporation (INTC) has run into some heavy headwinds. Increased competition and slowdowns in production have resulted in share price downgrades and subsequent losses of value. Now, once again, a delay in the launching of new processors has reduced investor confidence in the firm. (See Intel stock charts on TipRanks)
Detailing this development in his report, Hans Mosesmann of Rosenblatt Securities explained that the anticipated launch of Sapphire Rapids processors will be delayed by three to six months. The chips are now expected to be released in Q2FY22.
Mosesmann reiterated a Sell rating for the stock, and assigned a price target of $40. This prediction reflects a potential 12-month downside of 28.75%. The five-star analyst added that this delay could stem from several factors, such as “tile yields, silicon yields, [and] core counts.”
Additionally, competition from Advanced Micro Devices, Inc. (AMD) is gaining strength. AMD is projected to release a “monster performer” processor soon. Mosesmann expects Intel to eventually lose out noteworthy market share to AMD.
Taking into consideration that Intel’s CEO is relatively new on the job, Mosesmann does not foresee any meaningful shifts in company direction or outlook for years to come. From this, he derives his negative rating on the stock. The analyst wrote that “the Sapphire Rapids delay is a humbling experience” for the fresh chief operating officer.
Mosesmann insisted that Wall Street’s moderately confident view on Intel will be brought down to a more realistic level as the company’s roadmap comes more clearly into view. He expects more processor launches to be delayed as well, with the announcement of each taking its toll on the stagnating share price.
On TipRanks, INTC has an analyst rating consensus of Hold, based on 10 Buy, 9 Hold, and 7 Sell ratings. The average Intel price target is $63.59, representing a possible 12-month upside of 13.27%. Intel closed Wednesday at a price of $56.14 per share.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
