Full 360-Degree Earnings Preview For Dell (DELL, HPQ, AAPL)

Dell Inc. (NASDAQ: DELL) is set to report earnings after the closing bell, and investors will paying close attention for any clues on how the report sums up Hewlett-Packard Co. (NYSE: HPQ) as well.  Thomson Reuters estimates are $0.52 EPS and $15.96 billion in sales.  Be advised that some of the other consensus reports are showing a figure of $0.51 EPS expected.  This also marks its fiscal year-end for its January results.  Next quarter estimates are $0.47 EPS and $15.18 billion in sales.

While a firm called Maxim Group started coverage last week with a “Buy” rating,  Baird downgraded the stock to Neutral and S&P Capital IQ also just last week removed a Strong Buy rating in favor of a Buy rating.  Stern Agee recently cut the rating to Underperform as well.  These calls are all based upon valuations and the new year high as of today is now $18.36. 

The consensus price target from Thomson Reuters is $18.47.  While that consensus price target has recently risen, many investors and analysts remain doubtful about much more upside.

Options traders appear to be braced for a move of almost $1.00 in either direction.  As the stock has recently hit a new year high, a chart analysis is not very insightful. ��

Where this gets interesting is that if you take out the ongoing continuous love of Apple Inc. (NASDAQ: AAPL) in the technology and PC segments, Dell remains a cheap stock at 9-times the forward year earnings estimates and barely 0.5-times expected sales. The reason for value is simple… no growth.  Dell also pays no dividend and it is sitting on more than $17 billion in cash and liquidity.

JON C. OGG