Updated at 3:38 pm EST
Intel (INTC) - Reportshares, an Intel Corporation, fell Wednesday after Citigroup warned that the chipmaker might pre-announce more modest-than-expected results in the second quarter and lowered their near-term profit estimates.
Citigroup analyst Christopher Danely, who has a "neutral" rating on the stock with a price target of $45, said his bear case for the stock is starting to develop more rapidly than anticipated, citing CFODavid Zinsner during the Global Technology Brokers Conference.
Danely is holding onto his previous projections for $1.55 per share in 2023, a 34% decline year on year, but added that "we now anticipate Intel to adversely pre-announce or miss 2Q22 guidance," while also lowering expectations accordingly.
His new revenue projection for 2022 is $2.5 billion lower, with earnings dipped at $2.33 pe share, down 30% from his previous estimate.
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Intel''s stock was found to be 5.23% lower in late afternoon trading Wednesday, compared to $41.25 each, a move that would extend the stock''s year-to-date drop to 25.25%.
Intel said in late April that supply chain disruptions combined with China''s Covid lockdown would reduce near-term earnings to $18 billion and result in a weaker-than-expected margin of 70 cents per share for the second quarter.
Intel announced a $5.4 billion takeover bid for Tower Semiconductor (TSEM) - Get Tower Semiconductor Ltd. Reportearlier this year, and disclosed that gross margins would decrease by 6 percent this year, to 52%, before slowly improving by 2026, a year ahead of its previous projection.
Intel intends to invest $20 billion in two chipmaking businesses in Ohio following on from similar investments in Arizona last March, which it believes will be successful within three years as it expands domestic production.
