) to buy from strong buy.
Analyst Don Young says the downgrade reflects more aggressive price setting. He says he doubts the PC sector's sacrifice of short-term profitability will lead to long-term gains. He says the company's low double-digit revenue trend and its likely EPS decline for the full year makes Dell vulnerable.
Young says rumors about further streamlining expense reductions confirm the belief that the company is preparing for a drawn-out price war. He suggests the best way to play out hardware pricing pressure is to own Microsoft (MSFT
Young cut the $0.83 fiscal 2002 (Jan.) EPS estimate to $0.74. He cut the price target to $30.