Shares of Intel fell more than 1 percent on Tuesday after Bernstein downgraded the stock and slashed its price target, citing a narrow path for further gains and uncertainty following the abrupt departure of its CEO.

Analyst Stacy Rasgon lowered his rating on Intel to underperform from market perform and slashed his price target on the Dow component to $42 per share from $54. Rasgon’s new price target implies a 17.2 percent downside from Monday’s close of $50.71. The stock traded at $49.75 before the opening bell on Tuesday.

“It is becoming increasingly apparent that the structural issues we have promulgated for years are becoming ever obvious to investors,” Rasgon said in a note. “And now, we believe uncertainty around the CEO change provides an opening, limiting upside risk if numbers continue to move up for the time being, while these structural issues grow more visible.”

“To that end, we see 1) the leadership vacuum providing some protection from further upward revisions (with multiples coming down on the guidance raise); 2) EPS growth slowing into 2019 as compares get harder and structural issues build; and 3) an increasingly competitive environment,” Rasgon said.

Rasgon had upgraded Intel in April after the company reported stronger-than-expected second-quarter earnings, but said in the note “we have been regretting that upgrade.”

Brian Krzanich was forced out of his post as chief executive last week after an investigation into what the company called a “consensual relationship with an Intel employee.”

Since then, Intel’s stock has fallen nearly 5 percent through Monday’s close. The stock is still up nearly 10 percent year to date and has jumped 48.8 percent over the past 12 months.

Source: Investment Cnbc
Intel shares slide after Bernstein downgrade