Dell: Dude, You’ve Got A PC Demand Problem

Yesterday’s ugly Q4 warning from Intel (INTC) has triggered several analysts to take a more cautious stance on Dell (DELL) - after all, fewer processors sold is a pretty good hint that there will be fewer PCs sold. Goldman Sachs analyst David Bailey moves to Sell from Neutral, cutting his price target to $9, from $14. “Even at current depressed levels, we expect Dell shares to underperform on an absolute and relative basis as margins and earnings deteriorate further,” he writes. “Without software offerings of its own and with a services business that is tightly tied to its hardware shipments, Dell remains highly dependent on transactional hardware sales and pricing, both of which are likely to suffer as demand falls.” His EPS estimates drop to $1.31 from $1.44 for this year, and to $1.25, from $1.51 for next year. Keith Bachman, of BMO Capital , cuts his rating to Market Perform from Outperform, reducing his target to $11, from $14. “While ... (link)