06:19 AM EST, 12/11/2024 (MT Newswires) -- Intel ( INTC ) was downgraded to S&P's BBB rating from BBB+ over a slow industry recovery and higher-than-expected manufacturing costs that are expected to last through 2025, the rating agency said Tuesday.

Intel's ( INTC ) discretionary cash flow, or DCF, is expected to improve amid the chipmaker's cost-cutting efforts, but its DCF-to-debt ratio is seen to approach 10% by the end of 2026, "a level we view to be appropriate at its current rating," S&P said.

S&P also pointed that the departure of Intel ( INTC ) Chief Executive Pat Gelsinger brings uncertainty to the execution of the company's turnaround plan, especially amid fierce competition in the chip industry.

Intel ( INTC ) would need a consistent strategy under a new CEO, launch products on schedule and reach cost-cutting targets to improve its credit metrics over the next two years, S&P said.