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Citi Analyst Recommends Buying Dell Technologies Stock Due to Recovery Potential
Investors Advised to Capitalize on Buying Opportunities in Dell Technologies
Citi analyst Asiya Merchant suggests that there is a buying opportunity in Dell Technologies and advises investors to capitalize on it. Merchant initiated coverage of Dell with a buy rating and set a $60 price target. She believes that Dell's leadership in a category that is "poised for recovery" makes it an attractive investment. While recovery in storage and compute remains uncertain, there are signs of early recovery in commercial PCs, which is a positive indicator for the company.
Positive Factors for Dell Technologies
Merchant highlights several positive factors for Dell Technologies. Firstly, Dell holds a leading share in commercial PCs, which positions the company well for growth. Additionally, the company has the potential for inclusion in the SP500 index, which could act as an incremental catalyst for its stock price. Merchant also mentions that Dell's return to normalized FCF (free cash flow) margins could drive an uptick in shareholder returns and reduce core debt leverage. Furthermore, the company's estimates have been de-risked, providing a more conservative outlook.
Stock Performance and Price Target
Dell Technologies' stock has performed well this year, with a 32% increase. Despite a challenging market for tech hardware names, Dell has managed to outperform. Merchant's $60 price target suggests that the stock could rise another 12.9% from its closing price on Thursday. She explains that stock price performance is strongly correlated with EPS (earnings per share) estimate revisions, and Dell's positive positioning in areas poised for recovery, margin expansion through mix shift, and de-risked estimates make it a favorable investment choice.
In conclusion, Citi analyst Asiya Merchant recommends buying Dell Technologies stock due to the company's leadership in a category that is expected to recover. With positive factors such as strong positioning in commercial PCs, the potential for inclusion in the SP500 index, and improved financials, Dell Technologies presents a promising investment opportunity.
A "Hot Take" on the Impact of Dell Technologies' Recovery Potential on a New Business
Dell's Recovery Potential Indicates a Positive Outlook for the Tech Industry
The recommendation by Citi analyst Asiya Merchant to buy Dell Technologies stock based on its recovery potential can provide valuable insights for new businesses operating in the tech industry. Dell's leadership in a category that is "poised for recovery" indicates a positive overall outlook for the sector, which could benefit emerging businesses in several ways.
Opportunities for New Businesses
1. Collaboration Potential: As Dell Technologies experiences growth and restores its financial health, it may seek opportunities to collaborate with smaller, innovative companies. This can create avenues for partnerships and strategic alliances, allowing new businesses to leverage Dell's resources, market reach, and customer base.
2. Investor Interest: The recommendation to buy Dell's stock indicates increasing investor confidence in the tech industry's recovery. As a result, new businesses operating in related areas may also attract investor attention and funding, as market sentiment improves and capital flows into the sector.
3. Market Expansion: Dell's strong positioning in commercial PCs signifies a potential recovery in that segment. New businesses focusing on computer hardware, software development, or related services could benefit from increased demand and market growth. Dell's recovery could potentially signal new opportunities for partnerships or customer acquisition.
4. Index Inclusion Impact: Dell's potential inclusion in the SP500 index could have ripple effects on the market and the overall perception of the tech industry. This positive development can create a favorable environment for new businesses, as it highlights the potential for growth and stability within the sector.
In conclusion, Dell Technologies' recovery potential, as recommended by Citi analyst Asiya Merchant, provides a positive outlook for the tech industry. New businesses operating in this sector can potentially benefit from collaboration opportunities, increased investor interest, market expansion, and the overall positive sentiment generated by Dell's recovery. It is important for entrepreneurs and startups to stay informed about industry trends and developments to make strategic decisions and capitalize on the opportunities presented by Dell's recovery.
Article First Published at: https://www.cnbc.com/2023/06/30/buy-dell-shares-as-commercial-pc-market-starts-to-recover-citi-says.html