This morning, Credit Suisse is giving a little boost to shares of Dell, Inc. (NASDAQ:DELL). The broker has reiterated its "Outperform" rating on the stock, but has hiked its price target from $32.00 to $35.00 based on recent efforts. This may not seem substantial on first glance, but this translates into a 10% upside call to what now may be 20% upside in the stock (at least according to Credit Suisse).
The recent entrance into retail store sales is the main culprit for the call, although that will of course impact working capital and gross margin based upon having to keep more inventory outside of its traditional just-in-time model. Some of this will be offset by the restructuring plan and the 10% workforce cuts. One area that is worth noting is that this also points to a recovering domestic corporate spending trend, which has been elusive for the PC maker.
Shares of Dell are up 0.4% pre-market to $29.06. With Intel (NASDAQ:INTC), Advanced Micro Devices (NYSE:AMD) and Microsoft (NASDAQ:MSFT) reporting this week, we should get a more clear picture on the overall health of the PC-market in the US and internationally.
Jon C. Ogg
July 17, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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