Intel Stock On the Rebound, But Analyst Sees Increased Risks

INTC is still pacing for its worst week in months after the CEO exit

Managing Editor
Jun 22, 2018 at 10:13 AM
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Tech concern Intel Corporation (NASDAQ:INTC) had a rough day yesterday, after CEO Brian Krzanich unexpectedly resigned from his post following an investigation into his alleged consensual relationship with an employee. The company's board appointed Intel CFO Bob Swan as interim CEO, effective immediately. In light of the C-Suite shake-up, INTC stock was hit with a pair of price-target cuts.

Independent Research cut its price target on the blue chip to $57 from $59. Meanwhile, Needham slashed its price target on the semiconductor name to $60 from $62, citing Krzanich's departure as the catalyst behind the move. Analyst N. Quinn Bolton said Krzanich was the "driving force behind Intel's transition to a data centric business," and sees "increased risks" from competition with Advanced Micro Devices (AMD) -- echoing several other brokerage firms of late. Still, 17 of the 28 analysts following the stock still sport "buy" or better ratings.

Despite the negative analyst attention, INTC stock is up 1% at $52.72, at last check. Prior to this week -- set to be the equity's worst since early April -- Intel stock had been an outperformer on the charts. The shares touched a 17-year high of $57.59 on June 4, and are still up 53% year-over-year.

Options traders have been leaning bullishly, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing INTC with a 10-day call/put volume ratio of 3.32, ranking in the 72nd percentile of its annual range. This means that calls have been purchased over puts at a faster-than-usual clip during the past two weeks.

Lastly, the stock has consistently rewarded premium buyers, per INTC's lofty Schaeffer's Volatility Scorecard (SVS) ranking of 85 (out of a possible 100). In other words, the stock has made bigger moves on the charts in the past year, relative to what the options market had priced in.


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