Investing 11-11-2022 20:19 7 Views

Intel shares no longer have any meaningful upside: JPMorgan

Intel Corporation (NASDAQ: INTC) has been cut nearly in half this year and a JPMorgan analyst says you shouldn’t cling to the hopes of a swift recovery either.

Several headwinds are weighing on Intel shares

Analyst Harlan Sur double downgraded the multinational on Friday to “underweight” and trimmed his price target by 50% to $32 a share, which doesn’t represent a meaningful upside from here.

Rising competition, uncertainty around whether or not the management will be able to execute a complex turnaround, and a difficult macroeconomic environment were among reasons cited for the dovish view.

After several years of server CPU share loss to AMD and continued product execution missteps, we believe it will be several years before Intel is able to reverse the tide to reclaim technology leadership in hopes of regaining market share.

Intel shares sure are cheap at about 9 times – but the analyst just doesn’t see a catalyst that warrants owing this stock right now.

Intel Corp lowered its full year guidance last month

Last month, Intel Corporation reported better-than-expected results for its third financial quarter but lowered its sales outlook for the full year citing softening PC demand.

In his note, Sur said the chipmaker is remarkably behind in terms of technology versus its competitors, including AMD and Taiwan Semiconductor Manufacturing.

We note that it took four years after AMD CEO Lisa Su took the reins before AMD started to gain meaningful PC/server market share and the stock started to properly reflect those gains.

To that end, he expects the Intel shares to take at least another 12 – 18 months to price in the much-talked about turnaround since Pat Gelsinger became the Chief Executive only in March of 2021.

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