Dell Technologies Inc (NYSE:DELL) seems poised for sustainable revenue growth of 2% to 4% and earnings growth of mid-to-high single digits, both of which are higher than Hewlett Packard Enterprise Co (NYSE:HPE) and HP Inc (NYSE:HPQ), 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 $6-8B in excess cash on its balance sheet,” he added.
DELL Price Action: Shares of Dell Technologies had risen by 1.43% to $58.02 at the time of publication Monday.
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