UPDATE: Sterne Agee Downgrades Dell to Underperform

According to a research report published today, Sterne Agee has downgraded Dell Inc.

from Neutral to an Underperform rating as it is concerned with Dell's fundamental position. In the report, Sterne Agee commented, “We believe DELL remains in a tough competitive position sandwiched between lower-cost players (Lenovo and Acer) and AAPL encroaching more in its core PC business as Macs and iPads gain share. Despite efforts to grow beyond a PC company, we estimate 70%-75% of its business is tied to PCs. This includes peripherals, software, and services. In addition, we see HPQ, IBM, and CSCO competing more in its core market in small-medium business (

) and servers. We view DELL as a company in transition that needs to take more aggressive steps. A key risk to our rating is if the equity market continues to be favorable, causing a further upside bias in shares.” Sterne Agee maintains its $15 PT on Dell, which closed yesterday at $18.04.