Dell Technologies Inc. seems poised for sustainable revenue growth of 2 percent to 4 percent and earnings growth of mid-to-high single digits, both of which are higher than Hewlett Packard Enterprise Co. and HP Inc., which trade similar multiples, according to Bernstein.
The Dell Technologies Analyst
Toni Sacconaghi upgraded the rating for Dell Technologies from Market Perform to Outperform while raising the price target from $63 to $72.
The Dell Technologies Thesis
The company has entered the new year with a backlog of around six weeks in its PC business, Sacconaghi said in the upgrade note.
He added that Dell Technologies has “a relatively high mix of commercial versus consumer (75/25) PCs, which should help cushion results should consumer PC demand slow.”
“We also believe that Dell’s storage business should benefit from an elevated backlog and a mainframe cycle,” the analyst wrote. “We estimate that Dell has $6-8 billion in excess cash on its balance sheet,” he added.
By Priya Nigam
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