Intel (NASDAQ: INTC) will either lose market share or be forced to cut its prices to compete with its resurgent competitor AMD (NASDAQ: AMD), according to Barclays.
The firm lowered its rating to underweight from equal weight for Intel shares, predicting the chipmaker will generate earnings per share below expectations next year.
"Intel faces a costly battle ahead to retain share as competitive threat from AMD heats up, along with near-term slowing of end markets," analyst Blayne Curtis said in a note to clients Monday. Intel's financial model "sensitivity shows material downside to EPS, declining FCF [free cash flow] a real possibility."
Curtis lowered his price target for Intel shares to $38 from $53, representing 20% downside to Friday's close.
The analyst said Intel faces a "no-win" situation of either cutting prices or losing market share to AMD.
Curtis reduced his estimate for Intel's 2019 earnings per share to $4.21 from $4.30 versus the Wall Street consensus of $4.27.
On Friday, Intel's interim CEO, Bob Swan, said the company has enough supply to meet its 2018 full-year revenue outlook, but admitted chip supply was "tight" especially in the entry level part of the market.
In late September, the company known as "Mr. Chips" extended its field programmable gate array (FPGA) acceleration platform portfolio with the addition of the new Intel® Programmable Acceleration Card (PAC) with Intel® Stratix® 10 SX FPGA, Intel’s most powerful FPGA.
The company’s stock docked 15 cents to $47,14
Tech Insider
