Brean Murray Raising Price Target On Dell (DELL)

Brean Murray Carret & Co. is raising its price target on Dell Inc. (NASDAQ: DELL) to $17 from $16, and is keeping its Buy rating on shares after the company reported better than expected earnings yesterday.

In a note sent to clients, Brean Murray writes, "Significant gross margin upside primarily from component cost tailwind allowed Dell to generate a material EPS beat despite softer-than-expected revenue; clean EPS of $0.45 was significantly stronger than the Street consensus of $0.32; we expect the stock to react favorably today given the magnitude of the beat; through 2010, the lack of desired gross margin expansion has been the biggest concern among investors regarding the stock; ironically, Dell likely faces the opposite issue now; managing gross margin expectations from 20.0% after generating a 280bp increase Q/Q. Revenue was most soft in consumer (expected to continue), but also in storage (less EMC (EMC, $21.51, Buy) business as that relationship re-adjusts) and other segments generally as Dell takes a thoughtful (eye on profitability) approach to revenue generation. Overall, Government was quite solid, although Europe was somewhat soft."

Shares of DELL are up 54 cents in pre-market trading to $14.20, a gain of nearly 4%.