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Dell Shares Receive Mixed Reviews from Analysts

Strategic Insights

— 1 min read

Analysts' opinions on Dell's future prospects diverge following a lackluster second-quarter earnings report. While Chris Whitmore at Deutsche Bank raises his price target to $25, citing the company's undervaluation and expected benefits from Microsoft's Windows Vista release, Keith Bachman at Banc of America Securities remains pessimistic, reducing his 12-month forecast to $21 due to Dell's unclear plan to reverse its financial struggles. Other prominent banks, including Goldman Sachs and UBS, have also downgraded Dell stock.

Key Takeaways:

  • Chris Whitmore, Deutsche Bank analyst, raises his price target for Dell shares to $25, citing undervaluation and benefits from Microsoft's Windows Vista release.
  • Dell's second-quarter profit fell 51% to $502 million, with shares falling 2.8% to $22.16 in New York.
  • The U.S. Securities and Exchange Commission requested information from Dell regarding revenue recognition and accounting matters.
  • Dell's expanded relationship with Advanced Micro Devices (AMD) will enable it to enter AMD-based PC and server markets, creating pressure on rival Hewlett-Packard.
  • Keith Bachman, Banc of America Securities analyst, reduces his 12-month forecast to $21 for Dell, citing the company's lack of a clear plan to improve its financial performance.
  • Other major banks, including Goldman Sachs and UBS, have downgraded Dell stock.
  • Dell will start using AMD processors in its Dimension desktops in September, marking its entry into the AMD-based PC market.

Statistics:

  • Dell's second-quarter profit fell 51% to $502 million.
  • Dell shares have decreased 26% this year.
  • The U.S. Securities and Exchange Commission requested information from Dell regarding revenue recognition and accounting matters (no specific date or time frame provided).
  • Dell's shares fell 64 cents, or 2.8%, to $22.16 in New York.

Sources:

  • "Dell's Financial Performance Slumps, Shares Fall," New York Times, no date (originally cited as "Friday")
  • "Dell Slumps as Profits Decline and Rivals Gain," Bloomberg, no date (originally cited as "Friday")
  • "Goldman Sachs, UBS Downgrade Dell," Investor's Business Daily, no date (originally cited as "Friday")

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