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

To: Meathead who wrote (20342)	11/2/1997 11:16:00 PM
From: hpeace	Respond to of 176387

Interesting analysts survey (Salomon Brothers) Salomon Brothers Inc Morning Research Call - THURSDAY, Oct 30, 1997 09:39am EST 30-Oct-97 Salomon Brothers (Rich Gardner) This is a summary only. * Compaq Computer HOLD to BUY: Re-initiating coverage with an $85 price target. * Dell Computer HOLD to BUY: Re-initiating coverage with an $110 price target. * Gateway 2000 HOLD: Re-initiating coverage with an $34 price target. * Apple Computer UNDERPERFORM: Re-initiating coverage with a $17 price target. ========================================================= *INVESTMENT OPINION CHANGES* Compaq Computer (CPQ HOLD to BUY $63 7/16) Richard Gardner, Jr. 1995A: $1.50 1996A: $1.88 1997E: $2.67 1998E: $3. Re-initiating coverage and upgrading shs to BUY. * CPQ is the leading vendor of desktops and servers in the world with a 12% an 30% sh, respectively, and the third largest vendor of notebooks with an approximate 10% sh. CPQ has held the top spot for three yrs and continues to take sh. The co is the most diverse of the pure PC plays in terms of geographic reach, product breadth and customer base. * CPQ is trading at an all-time high P/E. We believe this reflects increases in asset turns, ROIC and free cash during the past two yrs. We see continued improvements in CPQ's ROIC in the coming twelve mos, and therefore believe that the co will continue to trade at a premium to the S&P 500. At 22X earnings, our price target is $85. ---------------------------------------------------------- Dell Computer (DELL HOLD to BUY $83 1/2) Richard Gardner, Jr. 1995A: $0.39 1996A: $0.65 1997E: $1.38 1998E: $2.55 1999E: $3.45 Re-initiating coverage and upgrading shs to BUY. * Dell is the leading direct, build-to-order mfr of PCs and servers in the world. Dell has experienced tremendous sh increases during the past yr in servers, desktops and notebooks, growing its unit shipments 58% in 97 and 53% in 98. Dell's purely direct model has gone from a source of skepticism to a driver of widespread industry change. Dell shs were the top performer in the S&P 500 last yr. * We believe Dell can maintain or even boost its ROIC during the coming yr with a higher consumer mix, a higher mix of internet sales and continued strong earnings growth. Therefore, we believe that the shs will continue to trade at a significant premium to the mkt. With a 25 multiple, our 12 mo price target is $110. ---------------------------------------------------------- *NEW COVERAGE* Gateway 2000 (GTW HOLD $29 7/16) Richard Gardner, Jr. 1995A: $1.09 1996A: $1.60 1997E: $0.58 1998E: $1.91 Re-initiating coverage and maintaining HOLD. * Gateway 2000 is the second largest direct, build-to-order mfr of personal computers. Prior to the recent acquisition of Advanced Logic Research, Gateway derived all of its revenue from the desktop and notebook mkts. Gateway is also the least geographically diversified of the PC vendors-83% of its total revenue comes from the U.S. mkt. Gateway derives 40% of total revenue from the consumer mkt. * The shs trade at 17X forward 12 mo earnings despite two consecutive pre- announcements. We believe there is a high level of expectation in the current valuation. Q4 will be strong, but we prefer to stay to the sidelines pending more visibility. Price target is $34. ---------------------------------------------------------- Apple Computer (AAPL UNDERPERFORM $17 1/2) Richard Gardner, Jr. 1996A: ($5.70) 1997A: ($2.88) 1998E: $0.14 Re-initiating coverage and maintaining UNDERPERFORM. * Gil Amelio had put a solid strategy in place prior to his departure from Apple (including fair and widespread licensing and the development of a server-strength operating system for the corporate mkt). Another major shift in strategy was not what Apple needed. * Licensing was Apple's single best hope for regaining sh in the worldwide PC mkt. The Power Computing acquisition effectively ended licensing. This will be viewed negatively by semiconductor partners (IBM and Motorola), software developers and potential customers. * Apple needs a strong CEO for a turnaround. Who will want to assume responsibility for Apple's turnaround without the ability to effect change? Steve Jobs has already set Apple on a firm course. * Microsoft and Intel are now targeting Apple's traditional mkts with Windows NT and the Pentium II processor with AGP. ----------------------------------------------------------