Deutsche Bank Raises Price Target on Dell (DELL), Calls Guidance "Extremely Conservative"
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Price: $490.81 -0.75%
Rating Summary:
24 Buy, 21 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
24 Buy, 21 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Deutsche Bank is reiterating its Buy rating on shares of Dell (NASDAQ: DELL) and is raising its price target from $18 to $20.
The company reported its March quarter earnings with $15 billion in revenue and non-GAAP EPS of $0.55, which was mixed with the Street's prediction of $15.4 billion in revenue and EPS of $0.43.
Gross margin of 23.4%, best margin quarter in 10 years, was above expectations as the company continues to improve its supply chain and maintain disciplined with its spending. Dells notes that with margins like this shares of Dell are cheap.
The firm comments, "Dell raised its Op profit target to +12-18 Y/Y from prior guidance of +6-12% Y/Y. Assuming the low end of the rev guide and midpoint of profit guidance implies Dell will report Operating margins of 6.6% over the next 3 quarters. We view this as extremely conservative, particularly given the Dell just delivered 9.2% in the April Q. We expect additional EPS beats to improve investor confidence and support multiple expansion over the next 2-3 quarters."
Deutsche Bank is tweaking its FY12 revenue and EPS estimates from $63.9 billion and $1.75 to $62.9 billion and $1.85. It is also lowering its FY13 revenue estimate from $66.5 billion to $65.5 billion.
For more ratings news on Dell click here and for the rating history of Dell click here.
Shares of Dell closed at $15.90 yesterday.
The company reported its March quarter earnings with $15 billion in revenue and non-GAAP EPS of $0.55, which was mixed with the Street's prediction of $15.4 billion in revenue and EPS of $0.43.
Gross margin of 23.4%, best margin quarter in 10 years, was above expectations as the company continues to improve its supply chain and maintain disciplined with its spending. Dells notes that with margins like this shares of Dell are cheap.
The firm comments, "Dell raised its Op profit target to +12-18 Y/Y from prior guidance of +6-12% Y/Y. Assuming the low end of the rev guide and midpoint of profit guidance implies Dell will report Operating margins of 6.6% over the next 3 quarters. We view this as extremely conservative, particularly given the Dell just delivered 9.2% in the April Q. We expect additional EPS beats to improve investor confidence and support multiple expansion over the next 2-3 quarters."
Deutsche Bank is tweaking its FY12 revenue and EPS estimates from $63.9 billion and $1.75 to $62.9 billion and $1.85. It is also lowering its FY13 revenue estimate from $66.5 billion to $65.5 billion.
For more ratings news on Dell click here and for the rating history of Dell click here.
Shares of Dell closed at $15.90 yesterday.
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