Needham & Company Upgrades Dell (DELL) to Buy; What A Difference 48 Hours Makes

Needham & Company upgraded Dell (NASDAQ: DELL) to Buy with a price target of $17.00.

Needham analyst says, "Well, we certainly did not expect to be here so soon. The continued market selloff, coupled with historic decisions by HP (NYSE: HPQ), has dramatically changed the future prospects for Dell in only 48 hours. Specifically, we expect Dell to capitalize on the likely market disruption resulting from HP’s decision to seek strategic alternatives for its PC business. Additionally, Dell is now trading at a frothy 4.6x F12 EPS (ex. cash) and the year is already half over. Consequently, we are upgrading to Buy."

"What HP’s Decision To Exit The PC Business Likely Means. Having lived through both the Compaq acquisition and IBM’s (NYSE: IBM) sale to Lenovo, (both N/R) we expect material share leakage to competitors over the next 12-18 months, especially on the corporate side to Dell. Consequently, as consumers and corporations seek to buy PCs, Dell (and others) will likely see more of that business, driving Dell’s 12-13% global share higher vs. HP’s ~18% share."

For more ratings news on Dell click here and for the rating history of Dell click here.

Shares of Dell closed at $13.76 yesterday.

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