BofA/Merrill Lynch Trims Dell, HP, and Brocade Targets
It was just last week that Bank of America/Merrill Lynch said it was reaffirming the Hewlett-Packard Co. (NYSE: HPQ) was looking good and reiterated its Buy rating after its new higher guidance after updating its strategic realignment. Now we have…
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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
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
