Intel's Stock Plummets After Earnings: What To Know

Intel Corporation INTC shares are falling on heavy volume Friday after the company posted worse-than-expected second-quarter results.

The Details:

Intel missed analysts' expectations with quarterly sales of $12.83 billion, a 0.9% decrease year-over-year and earnings of 2 cents per share. 

The company also suspended its quarterly dividend beginning in Q4 and announced a $10 billion cost-reduction plan that it says will include a headcount reduction of greater than 15%. Intel guided for a loss of 3 cents per share in the third quarter. 

"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation," said Pat Gelsinger, Intel CEO. 

Read Next: Intel Stock Falls After Weak Q2 Results, New Cost Reduction Plan, 15% Headcount Reduction

Analysts React:

Raymond James downgraded Intel from Outperform to Market Perform, and multiple analysts reduced price targets on the stock following the print: 

• Truist Securities analyst William Stein maintained Intel with a Hold and lowered the price target from $33 to $25.
• Susquehanna maintained a Neutral rating and lowered the price target from $35 to $26.
• Morgan Stanley analyst Joseph Moore maintained an Equal-Weight rating and lowered the price target from $36 to $25.
• Goldman Sachs maintained its Sell rating and lowered the price target from $29 to $22.
• Deutsche Bank maintained Intel with a Hold and lowered the price target from $38 to $27.

Should I Sell My INTC Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Intel INTC have lost 39.74% year to date. This compares to the average annual return of -16.24%, meaning the stock has underperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Intel stock currently has an RSI of 18.35, indicating oversold conditions.

For analysis tools, charting data and access to exclusive stock news, check out Benzinga PRO. Try it for free.

INTC Price Action: According to Benzinga Pro, Intel shares are down 27.4% at $21.11 at the time of publication Friday.

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