Dell (DELL) shares are getting a lift this morning from UBS analyst Maynard Um, who raised his rating on the stock to Buy from Neutral, but with a new target price of $15.50, down from $17.50.
“We continue to believe DELL will be a beneficiary of an enterprise PC refresh that should begin in [the 2010 second half] and grow in 2011,” he writes in a research note. “We see concerns over PC industry softness driven mostly by consumer rather than enterprise as an aging enterprise installed base makes upgrades a greater priority.” Um sees limited downside for Dell, with the stock trading at 0.2x forward� EV/sales, worse than the 0.3x level in the depths of the downturn a year ago.
Um did, however, trim estimates to reflect PC unit share loss and increasing operating expense as the company builds out its channel and reinvests for growth. His January 2011 EPS forecast is now $1.24, down from $1.28; for FY 2012 he goes to $1.40, from $1.44.
DELL this morning is up 24 cents, or 2%, to $12.30.
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