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

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.”

“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.

______________________________
Scorecard—What He Said:

• Smith's Previous Appearance on CNBC (Dec. 10, 2010)

______________________________
More Market Intelligence:

• HP's Problems Are 'Severe' — So Buy It?
• Did HP Boost Margins in Short-Sighted Earnings Game?
• Stocks Will Move Higher After Correction: Stock Pickers

______________________________
CNBC Data Pages:

• Dow 30 Stocks—In Real Time
• Oil, Gold, Natural Gas Prices Now
• Where's the US Dollar Today?

______________________________
CNBC Slideshows:

• Rock Stars of Technology

______________________________

______________________________
More Tech Giants:

Hewlett-Packard

IBM

Microsoft

Apple

______________________________
Disclosures:

Smith does not own shares of DELL.

______________________________

Disclaimer