Intel Hit by Wave of Downgrades as Wall Street Says Wait

BofA, Ross Capital and other investment banks cut Intel to neutral from buy

Fourth-quarter revenue outlook falls short of market estimates

Weak PC market, impact from Israel plant accident

Intel Corp. shares plunged 29% on Oct. 31 after the U.S. chipmaker reported third-quarter results. While third-quarter earnings were solid, the company’s fourth-quarter outlook came in below market expectations.

Wall Street is telling investors not to buy Intel and to stay on the sidelines, CNBC reported, as brokerages moved in quick succession to downgrade the stock. Intel closed down 28.58% at $65.76 in regular Nasdaq trading.

Intel reported third-quarter revenue of $16.513 billion, up 21% from a year earlier, and adjusted earnings per share of 52 cents. Wall Street had expected revenue of $16.48 billion and adjusted EPS of 40 cents.

Intel forecast fourth-quarter revenue of $15 billion to $16 billion, below the market estimate of $17 billion. The main reasons were a weaker PC market driven by a sharp rise in memory-chip prices and production disruptions caused by an accident at Intel's Fab 28 plant in Israel in early October.

Bank of America, Ross Capital and Susquehanna Research cut their ratings on Intel to neutral from buy. Bank of America also lowered its price target to $100 from $145.

John Vinh, an analyst at KeyBanc, said profitability in Intel's foundry business may not improve again until the market looks to targets for the second half of next year or for 2030.

Lee Mi-ah, Hankyung.com reporter mia@hankyung.com