Dell Technologies (DELL – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Toni Sacconaghi from Bernstein maintained a Buy rating on the stock and has a $120.00 price target.
Toni Sacconaghi has given his Buy rating due to a combination of factors including Dell Technologies’ strong financial performance and promising advancements in their AI business. Dell’s recent quarterly results were robust, with a significant earnings per share (EPS) beat and solid free cash flow (FCF), which amounted to an impressive 110% of net income. The analyst noted Dell’s proactive stance, evident from a 20% dividend increase and guidance that surpassed consensus for future revenue and EPS, prompting an upward revision of FY 25 EPS estimates.
The bullish outlook is further supported by Dell’s AI server business, which not only reported substantial revenue and a near doubling of backlog but also exhibited a growing pipeline estimated to reach $7-8 billion. Additionally, Dell’s non-AI server business is improving, potentially benefiting from higher average selling prices (ASPs). In the broader context, the PC market, which is expected to rebound in the latter half of the year, aligns with Dell’s guidance for stable quarter-over-quarter performance. Sacconaghi’s optimism also extends to Dell’s conservative EPS guidance for Q1 25, indicating the potential for earnings to exceed expectations and contribute to a projected $8+ EPS for the year. Consequently, the analyst has raised the price target, maintaining an Outperform (OP) rating, and views Dell as a cost-effective investment in AI technology, despite the acknowledged risks of a future slowdown in the AI sector.
In another report released today, Citi also maintained a Buy rating on the stock with a $125.00 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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