Intel downgraded, reportedly weighing partial Mobileye stake sale

Intel (INTC) received a downgrade to Sell from Erste Group. It comes amid reports that it is weighing a partial sale of its stake in Mobileye (MBLY). Morning Brief Hosts Brad Smith and Madison Mills report more on the bearish call and some headwinds moving forward for the company.

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This post was written by Melanie Riehl

Video Transcript

Intel, the embattled chip company, receiving an analyst downgrade today.

And there are reports as well that the company is weighing a sale of its stake in Mobili.

Shares are down by about half a percent right now, So let's start things off with this downgrade.

It came from group and they were really looking at Intel and this downgrade from hold, uh, to sell.

According to this analyst, uh, we have a lot of factors that are outweigh here.

Number one, a cautious outlook.

They're taking a look at some of the competitors, calling them more robust, a MD and NVIDIA particularly, and the roads that they've made in a I to this juncture.

Now you remember that intel right now within this competitive landscape, they have a lot of the valuation.

That's really kind of putting back putting them back, or at least, uh, tied back to this PE ratio for the year considerably higher than that of its peers.

Uh and so with that in its mind, the valuation of intel, um, relative to the rest of the market, or at least in comparison to the rest of the peers, um, they say the upside is currently limited.

And so that's the reason for the downgrade there.

Uh oh, yeah.

And then, of course, you have the, uh, selling of that mobile.

I, uh, division as well.

We'll we'll see if that comes to fruition.

But that is at least what's reported at this juncture here.

And some interesting, uh, potential suitors as well.

And buyers for that.

Yeah, well, it's interesting that mobilise shares are down on the heels of that news that, uh, Intel is considering exploring its a sale of that stake.

But what stands out to me is that Pat Gelsinger, he has had a busy couple of years, certainly a busy couple of weeks.

We had that news about Intel potentially selling off their foundry business.

Intel has been a beneficiary of some of that weakness in the chip sector.

That I was talking about earlier as potentially a positive catalyst for the stock could be the increase of domestic production of chips.

But it hasn't been enough to make Intel sort of a safe place to be for investors and certainly for Pat.

I think he is dealing with a lot of big questions in terms of executive leadership at the company moving forward