Dell Technologies (DELL) Receives Buy Rating from Deutsche Bank with $144 Price Target - Analysts Predict Double-Digit Growth in Revenue and Earnings
Deutsche Bank has resumed coverage of Dell Technologies (DELL) with a Buy rating and a price target of $144, signaling a potential upside of 14% from current levels. The bullish stance is based on three key points:
1. Dell is expected to experience accelerated top-line growth, reaching double-digit percentages over the next few quarters. This growth will be driven by favorable conditions in key segments such as servers, storage, and commercial PCs, where Dell holds a leading market share.
2. The Infrastructure Solutions Group (ISG), which contributes to 45% of Dell's revenue, is poised to benefit from continued momentum in AI servers and a recovery in traditional servers and storage solutions.
3. Dell's capital allocation strategy focuses on returning the majority of its free cash flow to shareholders through dividends and share buybacks. The company's current dividend yield is 1.5%, and share repurchases are expected to reduce the share count by about 6% over the next three years.
Analysts project Dell's earnings per share (EPS) to grow at a 14% compound annual growth rate (CAGR) between 2025 and 2028, outpacing the company's own long-term targets. Dell's adjusted free cash flow is estimated to increase from $4.8 billion in the current fiscal year to $7.4 billion by 2028, with a significant portion being returned to shareholders.
In 2024, Dell shares surged over 65%, outperforming the broader market. Overall, Deutsche Bank's positive outlook on Dell Technologies reflects the company's strong position in key market segments and its clear capital allocation strategy aimed at maximizing shareholder value.
In conclusion, investing in Dell Technologies could potentially yield significant returns due to its projected growth in revenue and earnings, as well as its shareholder-friendly capital allocation strategy. Investors should consider the bullish rating from Deutsche Bank and the potential upside of 14% in Dell's stock price based on the $144 price target.
