Bernstein Upgrades Dell Technologies On Earnings Potential: What's Next?

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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