Dell (DELL) Estimates Cut

A Friedman Billings Ramsey (FBR) analyst is also trimming DELL revenue and EPS estimates for FY09 and FY10. His cutting estimates on DELL is based on on continuing downward revisions to the 2H08 notebook PC build forecast and forecasts that Taiwan notebook orders will be disappointing.

FBR maintains an Outperform because the firm still thinks this cyclical slowdown is already in the stock (we're skeptical). With a multiple of roughly 11.6x its new FY10 estimate, FBR believes that "Dell shares already reflect expectations for a cyclical slowdown in PCs." FBR also thinks DELL's margins will improve due to:

• unexpectedly favorable component costs
• new notebook models with lower cost designs
• coming changes to lower cost logistics

FBR reiterates OUTPEFORM on Dell (DELL), target price $30.

Regarding to the chart below, you can consider to buy DELL, now as its shares have bounced back from the support line and already fill the gap.






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