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Benjamin Reitzes, an analyst at UBS, on Tuesday raised his rating on Dell (NASDAQ:DELL) to Neutral from Reduce, asserting that pricing has “improved modestly” and that “checks for higher margin servers and storage are somewhat favorable.” Reitzes, however, says he still has “a negative view toward Dell’s dwindling business model advantage vs. HP (NYSE:HPQ).”

Reitzes says the upgrade is “solely a call on margins,” which he thinks have bottomed near-term. Reitzes says the company still has issues on the revenue line, and confesses that his $14.5 billion third quarter estimate “may be aggressive given share losses and a weak corporate desktop market.” He also says Dell “may not be out of the woods” regarding accounting issues now being reviewed by the SEC. He says Dell may need to disclose only abbreviated financial data when it reports on November 16, since it has not yet filed the previous quarter 10-Q.

Reitzes raised his price target for the stock to $25 from $20.

Source: Dell Improving Its Margins?