Intel Hit by Wave of Downgrades as Wall Street Tells Investors to Wait

BoA, Ross Capital and others cut Intel to neutral from buy

Fourth-quarter revenue outlook misses market estimates

Shrinking PC market, Israel factory accident weigh on outlook

Intel Corp. shares plunged 29% on Oct. 31 after the U.S. chipmaker reported third-quarter results. The quarter topped expectations, but the company's fourth-quarter outlook came in below Wall Street forecasts.

CNBC reported that analysts urged investors to stay on the sidelines rather than buy Intel, triggering a string of rating downgrades. Intel shares closed down 28.58% at $65.76 in regular Nasdaq trading.

Intel posted 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 factors were a contraction in the PC market following a sharp rise in memory-chip prices and production disruptions caused by an accident at its Fab 28 plant in Israel in early October.

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

John Vinh, an analyst at KeyBanc, said Intel's foundry business would need to be evaluated against targets for the second half of next year or for 2030 before profitability in that division improves again.

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