Zacks Investment Research downgraded shares of Intel Corp (INTC) from NEUTRAL to UNDERPERFORM on July 30, 2012, with a target price of $24.00.
Intel beat the Zacks Consensus by $0.04 in the second quarter, driven by strength in server and software businesses and supported by a moderate PC business. Intel maintained its dominant position in the high-margin server segment and continued to promise success in the mobile segment. Guidance disappointed however (due to lower builds at distributors). Intel also remains a laggard in the mobile segment and although its situation could improve by virtue of its Ultrabook and agreement with Google, Intel is yet to prove itself here. In the meantime, competition from ARM-based devices continues to intensify. Therefore, given the PC market weakness and the fact that mobile devices will continue to eat into its client business, we downgrade Intel shares from Neutral to Underperform.
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