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Intel Bear Case Coming ‘Even Earlier’ Than Expected. This Analyst Remains Neutral on the Stock.

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Intel

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Shares of


Intel

were falling Wednesday as Citi said its bear-case scenario was “taking shape even earlier” than expected.

Analyst Christopher Danely reiterated a Neutral rating on the stock, and now expects Intel (ticker:


INTC

) to negatively pre-announce or miss second-quarter guidance, given management’s commentary at a Bank of America conference.

“At a competitor conference, Intel appeared to talk down the quarter as company management mentioned that circumstances are worse than expected during the quarter,” Danely wrote.

During the conference, management mentioned that the company was still struggling with inventory related to Covid-19 lockdowns in China, even as executives were optimistic about the company’s long-term trajectory.

“We’re going to go through some choppiness for sure in the near term as everyone else will as well, and you know what we’ve got to do is kind of keep our heads down and drive the business, execute to the plan and things will have a good outcome for us,” said Intel CHief Financial Officer David Zinsner at the conference.

Danely maintained a $45 price target on the stock, but lowered his 2022 sales and earnings per share estimates. He had previously flagged lagging personal computer sales as an upcoming headwind for Intel, and had decreased his estimates earlier in the week.

Intel revised its second-quarter projections in April, when it reported first-quarter earnings. The company forecast less revenue than expected for the June quarter, citing weaker PC demand from consumer and macroeconomic uncertainty.

Intel stock was down 3.9% to $41.84 on Wednesday. The shares have fallen 18.6% this year.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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