Intel: Needham Reiterates Hold Rating with No Change in Recommendation

Intel: Needham Reiterates Hold Rating with No Change in Recommendation

Needham & Company has maintained its Hold rating on Intel Corp. (INTC) stock, with no change in its recommendation, following the tech giant's second-quarter earnings report. Despite the company's revenue surpassing analyst expectations, its adjusted EPS fell short, leading to a pre-market stock decline of 7.34% on Friday [2].

Intel reported a revenue of $12.86 billion for the second quarter, which exceeded the analyst consensus of $11.91 billion. However, the company's adjusted EPS for the quarter was a loss of 10 cents per share, missing the expected earnings of one cent per share. Despite the EPS miss, Intel's total revenue remained flat year-over-year, and the company ended the period with around $9.64 billion in cash and cash equivalents [2].

The chipmaker also announced plans to slash 15% of its employee base and cancel billions of dollars in expenditure on new chip facility constructions in Europe. Intel's CEO, Lip-Bu Tan, commented that these actions are aimed at building a more financially disciplined foundry and enhancing the company's competitive position. Tan, who took the helm in March, faces the challenge of reviving Intel and is under pressure to present investors with a clear strategy for addressing the company's issues [2].

Needham's analysts cited the company's ongoing restructuring efforts and the potential for a more disciplined capital expenditure strategy as reasons for maintaining their Hold rating. They also noted that Intel's Q2 revenue beat and promising outlook for competitive growth could be seen as early signs of the company's efforts to regain its competitive position in the semiconductor market [2].

Intel's third-quarter revenue is projected to fall between $12.6 billion and $13.6 billion, with an expected loss of 24 cents per share. Despite the EPS miss, the company's Q2 revenue beat and the promising outlook for competitive growth could be seen as early signs of the company's efforts to regain its competitive position in the semiconductor market [2].

References:
[1] https://za.investing.com/news/analyst-ratings/benchmark-reiterates-hold-rating-on-canadian-national-railway-stock-93CH-3800989
[2] https://www.benzinga.com/markets/equities/25/07/46626353/intel-stock-declines-over-7-in-friday-pre-market-whats-going-on