By Dhirendra Tripathi
Investing.com – Intel stock (NASDAQ:INTC) fell 2.5% on Thursday after Morgan Stanley and BofA Securities cut their targets to $47, according to StreetInsider.
The stock fell to a low of $47.62 in the session underway today, not far from its 52-week low of $43.63.
Morgan Stanley (NYSE:MS) analyst Joseph Moore also downgraded the stock to underweight from equalweight while BofA’s Vivek Arya maintained his underperform rating.
According to Moore, the stock should move sideways for the next couple of years. He said there are more actionable opportunities elsewhere and “We do not see a clear positive event path for Intel at this time."
CEO Pat Gelsinger has been pushing to restore his company’s dominance of the industry. He plans to turn the company into a contract manufacturer, much like Taiwan Semiconductor Manufacturing, the world’s largest chipmaker. With that aim in mind, Intel has committed at least $120 billion in setting up new capacities to make chips for rivals as well as usual clients like automakers and manufacturers of laptops, mobiles and other gadgets.
While Moore believes in the longer-term turnaround capability in Intel’s core business, he said “. . .The reality is that ramp of fixed costs creates a more "all-or-nothing" situation where the company is going to need to succeed in these new businesses - and still turn around their core business - or be looking at long term gross margin and cash flow degradation."