Sluggish Dell Transformation ‘Disappointing’: Pros

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Dellhas made strides in its transformation efforts, yet the company is falling short of key benchmarks on its road to reinvention, analysts told CNBC’s “Squawk on the Street” on Wednesday.

The computer giant reported better-than-expectedearnings Tuesday, but quarterly sales and full-year outlook fell short of what analysts had anticipated.

“Dell has been very consistent in their message strategy: They want to de-emphasize [personal computers] and drive growth from enterprise business,” Abhey Lamba, an analyst at Mizuho Securities, said. “But the milestones they’ve laid out for us, they’ve not delivered.”

In its earnings report, Dell said it expected solid growth in its enterprise business, but faced headwinds in trying to sell computers to individual consumers — many of whom are strapped for cash in a weakening economy.

Aaron Rakers, an enterprise hardware analyst at Stifel Nicolaus, said Dell’s weakness in consumer PCs “is definitely a disappointment, but the long-term transformation of this company continues to play out.” Nevertheless, he maintains a price target for the stock of $17.

The impending Windows 8 release from Microsoft “should help, but that looks to be more of a 2013 story, and a reflection of the company’s weak guide over the next couple of quarters,” Rakers said.

In a head-to-head comparison with Dell’s competitorHewlett-Packard, Rakers said HP had the better balance sheet fundamentals. Mizuho’s Lamba, however, said that because HP has “historically overpaid for some of acquisitions,” it could be vulnerable to a few write-downs in the future.

—By’s Javier David

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Neither analyst owns Dell or HP, but both Mizuho and Stifel, Nicolaus make markets in the stocks of Dell and Hewlett-Packard.