) to buy from market perform.
Analyst Dan Niles says second quarter strength is broad based, but says Dell is the best in the U.S. education, government and consumer markets. He thinks this is encouraging news heading into a strong third quarter for all of these segments.
Niles adds that ASPs are slightly better than expected as a rational pricing environment prevailed. He estimates that GMs amd OMs increased 50 basis points quarter over quarter, thanks to component price declines in areas like processors.
He upped his $0.75 fiscal 2003 (Jan.) earnings per share estimate to $0.76, and raised the $0.90 fiscal 2004 guidance to $0.91.
Niles set a $30 target; based on bottoming IT demand in the third quarter, as well as pickup in calendar 2003 driving better margins, EPS and multiple expansion while Dell gains share within this environment.