Intel Shares Jump Over 3% As It Announces $10B Stock Buyback Plan
INTC) shares jumped in the after-hours session Wednesday as the company said it was entering into accelerated share repurchase agreements to buy a total of $10 billion of the company’s common stock.
What Happened
statement.” data-reactid=”21″>Upon the completion of the agreements, the chipmaker will have purchased nearly $17.6 billion in shares as a part of its share buyback plan announced in October 2019, the company said in a statement.
The Santa Clara, California-based company said it would purchase 166 million shares under one such agreement, which is set to be completed by the end of this year.
“While the macro-economic environment remains uncertain, Intel shares are currently trading well below our intrinsic valuation, and we believe these repurchases are prudent at this time,” said Intel CEO Bob Swan.
The company’s shares have declined by almost 19% in the past month.
Why It Matters
beat the analyst consensus estimate of $1.10 by 11.82%. The chipmaker’s earnings rose 16.04% over the same period last year from $1.06 per share.” data-reactid=”30″>Intel recorded second-quarter earnings per share of $1.23, which beat the analyst consensus estimate of $1.10 by 11.82%. The chipmaker’s earnings rose 16.04% over the same period last year from $1.06 per share.
In July, BofA Securities analyst Vivek Arya downgraded Intel from Buy To Neutral and lowered the price target from $70 to $62.
Arya questioned the competitiveness of Intel’s manufacturing process after the crucial 7nm series of chips were delayed by a further six months.
AMD) and NVIDIA Corporation (NASDAQ: NVDA) as they move ahead with their 7nm processes.
Intel Price Action
Intel shares traded nearly 3.6% higher at $50.06 in the after-hours session after the news of the buyback broke. The shares closed the regular session 0.66% lower at $48.33.
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