Intel Corp (NASDAQ: INTC) has hit a fresh 52-week low, closing at $18.99 on Wednesday after touching $18.95 during the trading day.
The stock has experienced a brutal 44% drop over the past year, plummeting 59% year-to-date, as the tech sector faces a broad sell-off.
With a 31.63% decline last week alone, thanks to dismal earnings and a suspended dividend, investors are questioning whether this drop represents a unique buying opportunity as analysts hint at a possible 36% upside.
Q2 Earnings Miss: Intel's Latest Dip
Intel's recent Q2 earnings report failed to inspire confidence. The company reported earnings per share of 2 cents, which fell short of expectations by 80%, along with a slight revenue miss at $12.8 billion. These results led to several analysts downgrading the stock and prompted a lawsuit from shareholders accusing Intel of securities fraud, according to Reuters. The weak results, coupled with job cuts and dividend suspension, have only fueled negative sentiment.
A Whopper Of A Cost-Cutting Plan
In a bid to regain its footing, Intel announced an aggressive cost-reduction strategy. The plan includes structural changes, a significant headcount reduction of over 15% (roughly 15,000 job losses), and a cut in operating expenses exceeding $10 billion by 2025. This restructuring aims to drive cost savings and position Intel more favorably in a challenging market environment.
Analysts Still See A Juicy Upside
Despite the bearish trends, analysts present a mixed outlook for Intel. The consensus rating is Neutral, with a price target of $33.32. The latest assessments issued by analysts on Aug. 2 suggest an average price target of $26, indicating a potential 36% upside from current levels.
Bulls highlight Intel's strategic focus on expanding into sectors with high growth potential, such as FPGAs, and implementing its IDM 2.0 strategy. However, bears caution against intense competition in the PC and data center markets, declining sales, and manufacturing challenges.
As Intel navigates these turbulent waters, investors must weigh the risks against the potential for a significant rebound.
INTC Price Action: Shares of Intel were up 2.2% to $19.40 at the time of publication Thursday.