Goldman’s 10 Bets On A PC Replacement Cycle
Posted by Eric Savitz
Dec 3, 2009
Ya gotta believe.
Goldman Sachs hardware analyst David Bailey certainly does. This morning, he asserted that a corporate PC and server refresh cycle is coming, and that it is destined to be one of the most important trends in technology over the next two years. He sees PC units up 1.6% in 2009, 12.4% in 2010 and 12.9% in 2011, but with falling pricing keeping revenue growth in the low-to-mid single digits.
Bailey offers 10 ways to play the PC refresh trend:
* In hardware, he says Dell (DELL) will be the biggest beneficiary, but with Hewlett-Packard (HPQ) also getting a lift.
* In software, he says both Microsoft (MSFT) and Adobe (ADBE) are “likely winners,” on the new product cycles for Windows 7 and Creative Suite 5.
* In semis, Goldman recommends Marvell (MRVL) and LSI (LSI) due to their exposure to the hard drive market.
* In disk drives, they are bullish on both Seagate (STX) and Western Digital (WDC).
* In the distribution sector, they expects higher volumes to benefit both Ingram Micro (IM) and Tech Data (TECD).
To reflect the firm’s new, more bullish PC units forecast, Goldman analysts today raised their EPS estimates for DELL, STX, WDC and MSFT. Bailey also lifted his price target on Dell to $18, from $17.50
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