Goldman Sachs analyst Mike Ng maintained a Buy rating on Dell Technologies (DELL – Research Report) yesterday and set a price target of $87.00.
Mike Ng has given his Buy rating due to a combination of factors that signal a strong financial performance and promising growth prospects for Dell Technologies. The company’s fourth-quarter earnings per share (EPS) of $2.20 exceeded both Goldman Sachs and consensus estimates, which were pegged at $1.77 and $1.73 respectively. This outperformance was driven by a significant earnings beat in Infrastructure Solutions Group (ISG) EBIT, which more than compensated for the shortfall in Client Solutions Group (CSG) EBIT. Moreover, ISG margins were notably higher than expected, coming in at 15.3% compared to the anticipated 12.6% by Goldman Sachs and 12.2% consensus.
Additionally, the analyst was impressed by Dell’s AI server backlog, which at the end of the fiscal year 2024 stood at a substantial $2.9 billion, surpassing the forecast of $1.9 billion. This includes a remarkable quarter-over-quarter increase of nearly 40% in orders and $800 million in AI server shipments for the quarter. Dell’s commitment to shareholder returns was also highlighted by a 20% increase in its dividend to $1.78 annually and a share repurchase totaling $878 million, both figures outstripping Goldman Sachs’ expectations. Despite the slight underperformance in CSG revenues and margins, the strength in ISG’s results and Dell’s aggressive growth in the AI server market underpin Mike Ng’s optimistic Buy rating for Dell Technologies.
According to TipRanks, Ng is a 2-star analyst with an average return of 0.5% and a 45.10% success rate. Ng covers the Technology sector, focusing on stocks such as Apple, Cisco Systems, and Arista Networks.
In another report released today, Bernstein also maintained a Buy rating on the stock with a $120.00 price target.
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Dell Technologies (DELL) Company Description:
Dell Technologies Inc. is a multinational information technology company which is engaged in providing hardware and software services solutions. The comapny, through its Client Solutions Group (CSG), sells desktops, notebooks, workstations, third-party software and peripherals. Meanwhile, it offers storage, networking and servers as well as attached software and peripherals through its Infrastructure Solutions Group (ISG). Under the VMware division, the company provides cloud management, compute, storage and availability, networking and security, and other end-user computing solutions.
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