Dell "neutral," target price reduced - update

04/28/06 - UBS

NEW YORK, April 28 (newratings.com) - Analysts at UBS reiterate their "neutral" rating on Dell Inc (DELL), while reducing their estimates for the company. The target price has been reduced from $32 to $28.

In a research note published yesterday, the analysts mention that the target price has been reduced in-line with the downward revision in the estimates and the risks to the company’s business model. The analysts believe that FY07 might be a challenging year for Dell, with below-market growth in PCs and other core product categories. The EPS estimates for FY07 and FY08 have been reduced from $1.62 to $1.50 and from $1.85 to $1.70, respectively, to reflect persisting margin pressures and lower-than-market growth.