S&P Downgrades Dell (DELL) To Sell From Hold

It sounds like S&P is getting nervous about Dell (NASDAQ: DELL) getting into a bidding war with HP for 3PAR. (NYSE: PAR) Hence, they downgraded Dell from Hold to Sell, yesterday. S&P raised their 2011 EPS estimate to $1.29 from $1.25, but lowered the 2012 EPS estimate to $1.40 from $1.47. They also lowered their price target to $11 from $15

Here are quotes from the report:

“Dell is assessing its options after its bid of $27 a share for data storage company 3PAR on 8/27 was topped by a $30 a share bid by HP that same day. We think it likely that DELL will bid higher as it seeks to fill out its data-center product line up. Looking at cross-currents in the PC markets, we are raising our FY 11 (Jan.) operating EPS estimate to $1.29 from $1.25, but trimming our FY 12 EPS estimate to $1.40 from $1.47. Employing a lower target P/E multiple closer to peers, we are reducing our 12-month target price to $11 from $15./T. Smith-CFA”

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