Northland Capital Markets lowered its rating on Intel stock on Tuesday to underperform from hold, saying the chipmaker’s weakened demand will hold back growth.
“Intel maneuvers like a battle ship,” Northland analyst Gus Richard said in a note to clients. “It takes forever to turn the ship and even longer to change momentum. In addition, Intel threw the captain overboard six months ago and it remains to be seen if the new leader is Lord Nelson or Captain Queeg.”
Intel shares slipped 1.4 percent in premarket trading.
Richard said “trade tensions caused companies to pull in demand to beat the increase in tariffs expected” to come in January. Additionally, Richard thinks Intel is losing market share to Advanced Micro Devices and, at the same time, he sees slowing data center demand for Intel’s products.
“We continue to be more pessimistic about INTC gross margins as its competitive position is eroding and yields for 10nm [nanometers] are likely to depress gross margin” in the second half of 2019, Richard said.
Richard lowered Northland’s price target on Intel to $42 a share from $46.
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