RESEARCH ALERT-DB Alex Brown starts PC makers
NEW YORK, Nov 7 (Reuters) - Deutsche Banc Alex. Brown
initiated coverage of several computer makers, including Apple
Computer Inc. <AAPL.O> with a "market perform" rating and Dell
Computer Corp. <DELL.O> with a "buy" rating.
It also started Compaq Computer Corp. <CPQ.N> and Gateway
Inc. <GTW.N> with "buy" ratings.
In a research note, DB Alex Brown analysts said Apple has a
strong balance sheet, an excellent management team, a loyal
customer base as well as a powerful brand.
Its fundamental challenge remains building its user base
and expanding its opportunities beyond the traditional
desktop/notebook market, which the investment firm believes
will be an uphill battle.
DB Alex Brown said Dell is the best-positioned personal
computer firm because of the efficiencies of its direct model
and its opportunity to exploit efficiencies in higher-growth
areas like servers and storage.
Dell's future growth rate will hinge on its ability to
leverage its direct model to gain market share outside the
United States, the investment firm said.
DB Alex Brown said it still believes the proposed
Hewlett-Packard Co. <HWP.N> and Compaq merger is a positive for
Hewlett-Packard.
While Compaq's near-term revenue and earnings outlooks
remain cloudy because of weak PC trends and a slowdown in
corporate information technology spending on serves and storage
devices, DB Alex Brown said it thinks management is taking
necessary steps that should position it favorably when the
economy improves.
The investment firm said it expects Gateway to burn about
$50 million to $60 million in cash in the fourth quarter after
capital expenditures. With much of the industry and company bad
news already in the stock, DB Alex Brown said it thinks
downside in Gateway shares is relatively limited.
Shares of Apple were last off 6 cents at $19.51 and shares
of Dell dipped 8 cents to $26.16. Compaq shares fell 66 cents
to $7.84 and Gateway shares dipped 2 cents to $7.12.
((-- Reshma Kapadia, New York technology desk, (646) 223-6191))
REUTERS |
