Goldman Lowers PC Forecast and Warns of Aggressive Pricing at OEMs (HPQ) (DELL) (LXK) (QLGC)

May 21, 2013 8:39 AM EDT
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Goldman Sachs today lowered its 2013 PC unit forecast to -6.8% from -3.8% previously. Analyst Bill Shope warned that pockets of price aggression at large OEMs could spread.

"Dell's (Nasdaq: DELL) April quarter earnings report revealed that the company is pricing aggressively in defense of market share, and this drove a significant margin and earnings shortfall for the company. We believe the ASP impact of this aggressive pricing, however, was partly masked by the fact that Dell's aggression was centered on higher-end SKUs, and pricing may have been more aggressive at the end of the April quarter. We continue to believe pricing will become increasingly aggressive this year, and we now forecast ASP declines of 2.4% in 2013 and 5.9% in 2014 as compared with 5.1% and 5.9% previously," said Shope.

Goldman recommends investors avoid names with hefty PC, server or printing exposure. This includes HP (NYSE: HPQ), Lexmark (NYSE: LXK), and QLogic (Nasdaq: QLGC), all Sell-rated. Goldman has Buy ratings on Apple (Nasdaq: AAPL), EMC (NYSE: EMC), and IBM (NYSE: IBM).

For an analyst ratings summary and ratings history on Hewlett-Packard (NYSE: HPQ) click here. For more ratings news on Hewlett-Packard click here.

Shares of Hewlett-Packard closed at $21.18 yesterday.

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