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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Patrick E.McDaniel who wrote (174640)	4/6/2005 1:37:11 PM
From: kaka	Read Replies (1) \| Respond to of 176388

Patrick, Sentiment like this leading up to analysts meeting might account for the down move. Dell faces Wall St. scrutiny as growth in question Tue Apr 5, 2005 06:23 PM ET By Eric Auchard SAN FRANCISCO (Reuters) - Dell, the last major technology stock also considered a growth name, finds itself on the defensive ahead its highly anticipated annual briefing for Wall Streets analysts where it spells out its strategy ahead. The world's largest personal computer maker has mildly disappointed investors since it scaled back its growth outlook to 16 percent from the 18 percent and higher levels it had signalled late last year could be expected in 2005 and beyond. Since then, sales weakness has begun to sap several of its markets -- consumer, U.S. government, Asia and perhaps Europe. With overall PC industry growth slowing, investors are spooked over when, or whether, Dell can recover its momentum. "Dell is going to have to do a lot to convince people that they can gain share in a (PC) market that is sluggish," Goldman Sachs analyst Laura Conigliaro said in a telephone interview. She rates the stock an outperform. Given the crosswinds from the macro-economy and tougher than normal seasonal weakness in the computer market, several analysts expect Dell to reaffirm -- but not boost -- its near- term outlook for the quarter ending later this month. "We expect Dell to reiterate guidance ... but see virtually no chance of any upside," analyst Steven Fortuna of Prudential Equity Group LLC wrote in a note to clients. Dell shares have fallen back from a three-year-high of $42.57 earlier this year to close at $38.68 on Monday. The stock is down 8 percent in the year to date, compared with 2.5 percent for the S&P 500 market index. Unless investors leave Thursday's briefing at the company's Round Rock, Texas headquarters convinced Dell is patching up a variety of slow leaks, the stock has little to stop its slide. The shares bumped along at $35 for most of 2004. "People will feel a little more comfortable when they start to deliver the results. That's the only way the stock is going to lift from here," Conigliaro said. STRONG GROWTH, BUT VULNERABLE Dell's status as both a solid defensive stock and a fast grower is not fundamentally in question. In one way or another, 21 Wall Street analysts recommend buying the stock. Nine are neutral on the shares' potential. No one advises selling. The company needs to prove its strategy for expanding the share of corporate sales not just from PCs but from storage, computer services, printers and other areas can help drive Dell reach an $80 billion long-term revenue goal it recently set. Wall Street analysts widely believe the $80 billion goal is a three-year target, meaning Dell expects to grow around 17.5 percent on average over that period from the $49.4 billion it reported for its year ended January 2005. Dell saying it can steadily grow at this faster clip is one thing. Doing it is another. Dell's credibility has suffered as its growth rate has slowed this year after previously suggesting it was poised to accelerate. Some of the company's Teflon coating may be peeling off. "Dell is one of the last great credible stocks in the tech world," Conigliaro says. "You hate to see it lose some of that uniqueness." Dell's growth story is tied to share gains in its core PC market, expansion into certain international markets and an acceleration of sales of new business products and big-screen TVs for consumers. "Taking share from other people in a relatively stagnant PC market is not enough," says Mark Stahlman, an analyst with Caris & Co. in New York, who rates Dell stock a "buy." "In order to support those growth goals, there has to be new markets."