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Technology Stocks : Dell Technologies Inc.

DELL 140.42

+1.1%

3:59 PM EST

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To: D. Swiss who wrote (138746)	8/9/1999 7:01:00 PM
From: stockman_scott	Read Replies (3) of 176387

Drew: BBRS's Niles actually Upgrades DELL..... Maybe Mohan or Kemble have taken him out for dinner and enlightened him <VBG>.....Actually Niles has been quite bearish on DELL and INTC recently. He clearly is not always right BUT he does have some influence. This morning he released a report....Here are a few highlights.... <<DELL: Y/Y unit and revenue growth starting to stabilize after 1 year slide....Opportunites in services, storage, portables and enterprise should help Q3; upgrading to LTA with a $48 price target. Daniel Niles (415) 693-3241 Key Points: We believe DELL will report unit growth in the low 50s y/y with revenue growth in the low 40s. After a long slide in both revenue and unit growth from the July 1998 levels of 54% and 72% respectively, we believe that the current quarter will show some stabilization relative to the April growth rates of 41% in revenue and 52% in units. We believe the US and A/P showed strength with Europe essentially flat q/q. We believe that Europe grew at about half the rate as the US. Asia / Pacific is rebounding sharply with growth of about 50% with Japan also seeing good pickup. The Americas are seeing nearly 50% y/y revenue growth with the demand for servers counteracting severe price pressure on corporate and consumer desktops. We believe their corporate win rate is actually increasing. We believe EPS of at least $0.17 is reasonable and that at least 10% q/q revenue growth for Q3 is achievable given the current momentum and win rate. Opportunities in enterprise, storage and portables are helping slow price declines....DELL also has over 30% of revenues coming from the internet, and believes that percentage will keep growing going forward helping to reduce the cost of doing business. We believe that DELL now generates about $20M in daily sales (about triple y/y) through the internet. Also DELL continues to be at the forefront in their transition to PIII based systems which is helping against the ASP declines. Though the multiple still bothers us, we note that the tone of business seems to be improving leading us to our upgrade of the stock.... *Moving over the next two years, the installed base of commercial systems will likely go through a complete retooling as corporations continue to move from legacy mainframe systems to a more price-competitive client/server environment. With the delivery of the latest version of Windows NT, the market has a high quality competitor for the varieties of UNIX that have been around for so long and have garnered so much share of the workstation marketplace...>> ----------------------------------------------------------------------------------------------------- Overall it sounds pretty good to me.....Yet, IMO Niles is quite conservative with his price target for DELL . This company clearly is still a great firm to invest in for the LONG TERM....!! Best Regards, Scott

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