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S&P Analyst 'Confident' on Dell, Boosts Stock Rating

Wednesday, 18 May 2011 | 10:00 AM ET

Following Dell’s news on improving margins and the firm's "ability to weather a weakened consumer PC market," Tom Smith, computer hardware analyst at Standard & Poor's Equity Research, said he raised his rating on the stock to “buy” from “hold.”

Dell Earnings Beats the Street
A change in the computer maker's business strategy is driving higher margins for the company, says Brian Gladden, Dell chief financial officer/senior vice president.

“I’m having more confidence that [Dell] can sustain this” improvement, Smith told CNBC.

“For the past 2 to 3 years, my confidence in Dell was a little bit shaky because they were hitting gross margin in one quarter and not in the next—but here, for the past two quarters, they seem to have gotten it together.”

The computer maker posted earnings that easily exceeded Wall Street estimateson Tuesday, though the firm handed in revenue that fell just shy of analysts' forecasts. Dell also reported an adjusted gross margin of 23.4 percent.

Smith added that he expects Dell’s operating margins to continue improving.

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Scorecard—What He Said:

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows:

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More Tech Giants:

Hewlett-Packard

IBM

Microsoft

Apple

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Disclosures:

Smith does not own shares of DELL.

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Disclaimer

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