Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

ML Throws Water on Tech Bulls

Dell`s F4Q will be reported after the market close on February 12. We expect the company to hit our $0.28 EPS estimate on revenue of $11.5 billion. Recent concerns include (1) weak motherboard/notebook numbers from Taiwan, (2) market research figures indicating 20% Dell unit growth YoY in C4Q when the company has predicted 25%+, (3) firm component pricing, (4) web site incentives, and (5) a backup in disk drive inventories. Like Lexmark, Dell may mention a more positive tone but also say it hasn`t seen lots of orders yet, which might be perceived as backing off. Management should endorse F1Q revenue of about $11.2 billion and EPS of $0.28. We maintain our Neutral rating on the stock given that we don`t see much fundamental upside for now