Crowell Weedon & Co. Raise PT To $20 On DELL

Crowell Weedon & Co. has raised its price target on Dell Inc. DELL from $18 to $20 in light of Q1 earnings ahead of all expectations. Says Crowell Weedon, “DELL's fiscal Q1 (April) results were highlighted by a substantial year/year margin increase and earnings well above expectations. This was the second consecutive quarter of significant margin upside, and we have increased our 2011 EPS estimate to $1.94 from $1.70. While revenue was slightly below plan due to weakness in consumer PCs and public markets, DELL posted solid growth from servers, mobility, and services on the product side, and Large Enterprise and Small/Medium Businesses on the customer side. Dell's transition to higher-end enterprise products and services, and strength in the corporate PC market is driving competitive gains and higher margins. DELL trades at 8.4x our 2011 EPS estimate of $1.94, and the company's Enterprise Value of $24.3B is just 4.5x trailing adjusted EBITDA of $5.4B and 0.4x trailing revenue of $61.6B.” Crowell Weedon & Co. reiterates a Buy rating on the stock. DELL closed Friday at $16.10.