BofA/Merrill Lynch Trims Dell, HP, and Brocade Targets

For Brocade, the new price target goes down to $6.00 from a prior $6.50 target, based on 10x C2013E NOPAT of $0.64 less $0.26 net debt. For HP, the target was cut to $24.00 from a $27.00 prior target based upon 6x C2013E NOPAT of $4.95 less $5.30 net debt. For Dell, the target price was cut to $15.00 from a prior target of based on 5x C2013E NOPAT of $2.15 + $4.63 net cash.

Dell was noted as having weak PC demand and a solid start to 12G server cycle while HP was given a positive pre-announcement despite a challenging backdrop.  The report noted on NetApp operating margin to remain below long-term targets of 17-19% on lower volume and continued investment. For the second quarter outlook it sees sentiment as relatively neutral.

Brocade and Dell are both seeing their stock price down over 1%, while HP shares are currently down only 0.8%.

JON C. OGG