Jan 9, 2023 1:41 p.m | 2 minutes read
- CreditSuisse Analyst Shannon Cross had an outperform rating Dell Technologies Inc Dell with a Price target $50.00.
- Last week at CES, Cross caught up with Dell IR team’s Zak Broderick and Paul Frantz to catch up on the deal.
- The analyst made no changes to the estimates or price target.
- Macroeconomic uncertainty compounded difficulties in forecasting demand levels for F2024, with management assessing a variety of outcomes. This caused corporate estimates for F2024 to drop 10% to 12% during that time Result from 21.11 Phone call.
- While PC demand has weakened, the company believes the installed base has been fundamentally reset during the pandemic with a higher mix of notebooks (which have shorter lifespans) and higher-end devices (needed for productivity).
- The analyst expects continued focus on growing ASPs (rather than units) and maintaining margins above pre-2020 4-5% levels.
- The memory business is performing well, benefiting from an optimized and updated portfolio.
- Higher software and service content results in more deferred revenue, which is now beginning to be recognized as revenue. Dell believes it’s gaining market share.
- Cash flow is likely to be squeezed by PC weakness, but there are some ways to reduce inventories.
- Dell is sticking to its commitment Return cash to shareholders (dividend and share buyback) while continuing to explore M&A opportunities (assuming tuck-ins targeting growth areas like telecom and edge computing).
- also read: Dell intends to reduce reliance on China – India and Latin America are likely to benefit, analysts say
- Price promotion: DELL shares traded 0.88% higher to $42.795 on the latest check Monday.
- Photo via company
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