notebook shipments may struggle in the near term, adding further pressure to a stock that has traded lower this year, according to analysts at Citi.
Notebook shipments for February were down 11% month over month, Citi calculated, wider than the firm’s expectation of a 5% decline, said analyst Christopher Danely.
“We see notebook shipment weakness as another yellow flag after Intel (ticker:
) stated it sees an inventory correction in the notebook end market during its last earnings call,” the analyst wrote in a research note.
The lower sales could be partly attributed to component supply tightness, but Daley also believes the consumer notebook market is decelerating. The analyst expects PC sales to cool off during the second half of 2022 after two straight years of double-digit growth.
Daley reiterated a Neutral rating on Intel shares and a $55 price target.
In a separate research note, Daley noted that investor sentiment was “incredibly bearish” on semiconductor stocks in general, mostly due to concerns about rising inflation and the slowing of the Chinese economy, but also fear that China could invade Taiwan in the wake of Russia’s invasion of Ukraine.
But even then, some investors remain bullish on Intel, and have been using it as a hedge against a potential Chinese takeover of Taiwan in light of an attractive valuation, Daley added. Indeed, Intel insiders have been buying up the stock now that it’s reached new lows, with CEO Pat Gelsinger and Chairman Omar Ishrak buying stock at the end of February.
Morgan Stanley downgraded the stock to Underweight from Equal-weight two weeks ago, saying that the stock will trade sideways in the short term and medium term. The bank cut its price target to $47 from $55.
Raymond James analyst Chris Caso upgraded the stock on Feb. 23 to Market Perform from Underperform, saying his bearish thesis has played out, leading to a better valuation and growth outlook.
Intel stock was down 0.7% to $45.52 on Monday.
Write to Sabrina Escobar at [email protected]