Q2 Preview: Analysts Take Cautious Stance on Dell (DELL) Amid Tough PC Environment
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Price: $13.39 -0.15%
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
Rating Summary:
9 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 25 | New: 24
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Dell, Inc. (Nasdaq: DELL) is lower Tuesday heading into the PC and server giant's second-quarter 2013 results, expected out after the market closes.
Current Street expectations have dell reporting a 15 percent drop in EPS to 46 cents with revs of $14.73 billion. Estimize consensus numbers are at EPS of 43 cents and sales of $14.57 billion.
In the same period last year, Dell reported a 5 cent earnings beat and typically tops EPS views by 16 percent. according to data over the last several quarters.
Shares of Dell fell 27.4 percent in the quarter to $11.88 at the end of July. Shares are 4.8 percent higher since then, though Dell is still down 15 percent on the year.
Investors might want to view Acer's preliminary Q2 results, with the electronics giant saying PC sales were lower on overall macro weakness, though shipments were higher in the period.
Analyst View
Data from Streetinsider's Ratings Insider has nine analysts at Buy on Dell, 15 with a Neutral, and three at Sell.
The Street's price target average is $17, ranging from $9.25 to $25. Over the last year, Dell shares have traded within a range of $11.39 to $18.36.
Analyst Comments
Dell will be holding a webcast at 4:00pm CT. To access the event, click here.
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Current Street expectations have dell reporting a 15 percent drop in EPS to 46 cents with revs of $14.73 billion. Estimize consensus numbers are at EPS of 43 cents and sales of $14.57 billion.
In the same period last year, Dell reported a 5 cent earnings beat and typically tops EPS views by 16 percent. according to data over the last several quarters.
Shares of Dell fell 27.4 percent in the quarter to $11.88 at the end of July. Shares are 4.8 percent higher since then, though Dell is still down 15 percent on the year.
Investors might want to view Acer's preliminary Q2 results, with the electronics giant saying PC sales were lower on overall macro weakness, though shipments were higher in the period.
Analyst View
Data from Streetinsider's Ratings Insider has nine analysts at Buy on Dell, 15 with a Neutral, and three at Sell.
The Street's price target average is $17, ranging from $9.25 to $25. Over the last year, Dell shares have traded within a range of $11.39 to $18.36.
Analyst Comments
- Goldman Sachs -- which has a Sell rating on Dell -- sees EPS of 43 cents and sales of $14.766 billion. The firm recently trimmed views on the weaker PC environment. However, Goldman commented "Dell's stock could begin to find a floor as PC and server demand trends stabilize. Indeed, we continue to believe that Dell’s enterprise strategy is sound and could produce a far more attractive financial profile in coming years."
Goldman also sees enterprise solutions to contribute more to top-line growth this quarter, 32.4 percent versus 31.4 percent in Q113. Goldman commented, "...the higher margin contribution of this segment should allow enterprise solutions to account for just under 50% of total gross profit."
- Wells Fargo is modeling EPS of 45 cents and revs of $14.8 billion, but sees risk to their estimates. Wells said, "checks suggest a sluggish server market relative to our expectations (potentially $0.02-0.03 impact) though we are generally comfortable with our PC forecasts, which already embed market share losses."
The firm also noted that its model has baked in weaker PC expectations as well as market share loss.
On servers, Wells noted, "Our checks suggest a meaningfully slower market that could be down yr/yr (also note that IBM x86 revenues were down 8% yr/yr & ARW x86 sales down 5% yr/yr)."
Dell will be holding a webcast at 4:00pm CT. To access the event, click here.
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