NEW YORK (TheStreet) -- The PC space is slowing, as Apple (AAPL) continues to attract consumers to its Mac computers, and smartphones and tablets grow at warp speed. Dell (DELL) investors will be hoping that trend starts to turn around.
Wells Fargo analyst Maynard Um noted the continued weakness in the PC market, though believes the recent Windows 8 launch by Microsoft (MSFT) could help strengthen demand. He rated Dell market perform with a price target of $10 to $11.
Dell has had a rough go of it in recent quarters, as the PC becomes less relevant in both the consumer and enterprise segments. Dell is not alone, with HP (HPQ) being subjected to the same fate. According to IDC, Dell lost 0.75% of market share year over year as of the September quarter. China is stemming some of that decline, but not enough to stop Dell's worries.
Although Dell is trying to turn itself into a services and software company similar to IBM (IBM), Dell is still heavily reliant on PC sales for a hefty percentage of revenue. Wells Fargo's Um noted that PCs may account for as much as 48% of third-quarter revenue. As the PC market continues to degrade, having nearly half of quarterly revenue continues to drag on Dell's share price.Dell shares have fallen 34.52% so far in 2012. HP has fared even worse, off 49%, while Apple has gained 32.56% this year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV