Shares of Dell Inc
The lowered outlook was not a surprise, given the uncertain IT spending environment, BofA Merrill Lynch wrote in a note. It modestly raised its price target on the stock to $18.50 from $18, and maintained its buy rating.
Dell reported better-than-expected margins in the second quarter, but investors focused only on comments about whether government and corporate spending can hold up in the face of flagging economic growth.
Shares could be under pressure in the near term following a topline miss for both July-quarter results and the outlook, JP Morgan wrote in a research note.
We expect the revenue reset to shake out short-term focused investors.
J.P. Morgan Securities has an underweight rating and a $17.50 price target on Dell's stock.
Dell's shares were down 7 percent at $14.75 in trading before the bell, after closing at $15.80 on Tuesday on Nasdaq.
(This story is corrected in paragraph 2 to clarify that BofA Merrill raised, and not cut, its price target on Dell's stock.)
(Reporting by Sayantani Ghosh in Bangalore; Editing by Joyjeet Das)