Intel Corporation (NASDAQ:INTC) Tumbles To New Low On Another Downgrade

World largest maker of microprocessors Intel Corporation(NASDAQ:INTC) fell nearly 3 percent to $21.90 after a rash of downgrades by brokerages.

Robert Baird's Tristan Gerra maintained its Outperform rating on the stock but reduced the price target on the stock to $26 from $32 citing weak demand for notebooks from consumers.

Too high inventories are also expected to hurt the company's bottom line.

"Intel inventories are too high and will hurt gross margin in 4Q¸in our view. Given our belief the Windows 8-related ramp is mostly done, and outlook for a seasonally weak 1H13, Intel has no reasons to maintain high inventories internally and likely started to cut utilization rates in order to bring inventories back to normal levels. Historically, Intel’s gross margin has fallen sequentially whenever internal inventories reached too high levels," the note said.

Gerra has forecast Intel's earnings at 47 cents a share, revenues at $13.2 billion in the third quarter with 59 percent gross margin.

Consensus stands at $13.79 billion, 62.3%, and 55 cents.

Nomura Equity Research, which has a Reduce rating on the stock, said that gross margin would decline to 6.5 percent in the third quarter and another 3 percentage points to 59.3 percent in 2013.

"Intel’s balance sheet today is weaker. We estimate the net cash balance will decline from $10bn in Q2-11 to $3bn in Q4-12. This takes into account a $3bn investment in ASML and the face value of convertible debt," Nomura analyst Romit Shah said.