Q2 STOCKS TO BUY

INTC Attracts Bear Notes on Disappointing Q2 Forecast

Intel raised its full-year guidance, but not as much as investors expected

Deputy Editor
Apr 23, 2021 at 10:19 AM
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The shares of Intel Corporation (NASDAQ:INTC) were last seen down 2.8% at $60.80, even after the company reported a stellar first-quarter earnings report. Digging deeper, the semiconductor name reported beats on both the top and bottom lines, with earnings of $1.39 per share on revenue of $18.57 billion. Instead, investors are looking toward the company's full-year and second-quarter forecasts, which failed to meet analysts' expectations. 

The brokerage bunch is blasting INTC in response. No fewer than four brokerage firms have dished out bear notes, including Truist Securities and Needham, which cut their price targets to $69 and $70, respectively. Bank of  America also chimed in, maintaining its bearish view on Intel, and pointing out the company's lack of sales growth, lowered buybacks, which the brokerage firm sees at a headwind.

Coming into today, 19 of 27 firms were firmly in the bearish camp, sporting "hold" or worse recommendations. Still, INTC's average 12-month price target of $65.95 stands at an 13.2% premium to current levels.

On the charts, Intel stock is fresh off of an April 12 annual high of $68.49, though the equity quickly chopped lower, breaching the formerly supportive 60-day moving average today. The 100-day moving average still sits just below as a potential floor for today's selloff, though the stock is also trading back below its year-to-date breakeven. 

Meanwhile, in the options pits, there's been a serious penchant for bearish bets of late. In fact, the stock's 10-day put/call volume ratio of 1.22 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), stands in the highest percentile of readings in its annual range, meaning puts are being scooped up at a quicker-than-usual clip.  

Today options activity is  surging on both sides of the aisle, with 108,000 calls and 102,000 puts across the tape so far -- six times the intraday average. The monthly May 60 call is the most popular, with the weekly 4/30 59.50-strike put pulling a close second, and it appears positions are being bought to open at the former. 

 
 

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