Intel Stock Downgraded One Week Before Earnings

Short-term traders are more call-skewed than usual toward INTC

Managing Editor
Jul 17, 2018 at 9:26 AM
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Shares of Intel Corporation (NASDAQ:INTC) are 1.9% lower in electronic trading, after Evercore ISI downgraded the stock to "in line" from "outperform," and slashed its price target to $54 from $64 -- representing 3.8% upside to Monday's close at $52.01. This comes ahead of the tech name's second-quarter earnings report, slated for release Thursday, July 26, after the market close.  

Looking at the charts, INTC was on a long-term uptrend until its early June 17-year peak of $57.60, when the shares have dropped off to trade just below the $49 level. A bounce off its 160-day moving average helped push Intel stock back above the round $50 mark, though it's still staring up at its 30-day moving average -- a former layer of support that could now work as resistance.

Evercore ISI is far from the only brokerage firm downgrading INTC, even though most analysts remain upbeat. Of the 28 brokerages following the Dow name, 16 sport "buy" or "strong buy" recommendations. Plus, Intel stock's average 12-month price target of $58.87 is a 13% premium to current trading levels.

Digging into options data, Intel stock's Schaeffer's put/call open interest ratio (SOIR) of 0.75 ranks in the 34th annual percentile. This low ratio suggests that short-term traders are more call-skewed than usual toward the Dow stock.

Lastly, INTC's Schaeffer's Volatility Index (SVI) of 30% is in just the 31st percentile of its annual range. This indicates that near-term options are still pricing in relatively modest volatility expectations, even with earnings just one week away.

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