Intel's Quant Rating plunges to 3.26 as weak Q4 outlook weighs on sentiment

Intel (INTC) saw its Seeking Alpha Quant Rating downgraded to Hold from Strong Buy on November 2, following a sharp deterioration in its Quant Score after the chipmaker's Q3 results and weaker-than-expected Q4 outlook.

The Quant Score fell to 3.26 from 4.88 on October 30. Intel (INTC) had maintained a Strong Buy rating from late September through October 30.

The rating change follows Intel's (INTC) Q3 results, which presented a mixed picture, with adjusted EPS surging 126% Y/Y and revenue growing 21%, but sales slightly missing Wall Street expectations.

The bigger concern was its Q4 outlook, with revenue guidance of $15B-$16B falling short of the $17.05B consensus and adjusted EPS guidance of $0.25 missing the $0.43 estimate. Intel (INTC) also projected an adjusted gross margin of 38%, below the 42.8% consensus.

Compared with three months ago, Intel's (INTC) Momentum grade plunged to C from A+, while EPS Revisions fell to D+ from B. Valuation improved to B- from C+, Growth slipped to A from A+, while Profitability remained unchanged at A+.

Wall Street analysts also reassessed Intel (INTC) following its earnings report, with several firms lowering price targets.

Sentiment weakened, with Freedom Broker downgrading Intel to Hold from Buy and Seaport Global and Roth Capital cutting their ratings to Neutral from Buy. Several other firms, including UBS, JPMorgan, Citi, TD Cowen, DA Davidson, Wells Fargo, Wedbush and RBC Capital, lowered their price targets while maintaining existing ratings.

During its Q3 earnings call, CFO David Zinsner warned that the company “probably will not generate positive free cash flow” in 2027, citing higher capital spending and component commitments. He expects PC unit demand to decline 10% in 2027, while server CPU supply constraints could persist into 2028.