Dell Price Target Cut, as Stock Moves Into Support Range

Dell's stock price (NYSE: DELL) has been under some pressure in recent times, with the year-to-date decline of 20% bringing the price back to the $92 range, where support had been found back in August last year.

The company, a leading player in the technology sector, encountered a sharp adjustment in its stock market outlook as Loop Capital analysts revised the company's price target to $130, a considerable decrease from the previous $185. Despite the price target revision, the firm maintains a Buy rating on the stock.

A look at the chart below shows the prior dip to these levels, with a subsequent bounce once markets had taken stock. The price previously fell into the upper $80 range, with the rally that followed taking the stock up to the mid $140's, prior to the recent correction.

The fresh assessment from Loop Capital arrives following Dell's announcement of its Q4 results. The report highlighted a 7% growth in revenue, primarily driven by the company's Infrastructure Solutions Group segment, which saw a 22% rise. Analysts note that artificial intelligence (AI) remains a substantial growth driver, evidenced by Dell's significant AI server shipments totaling $2.1B, AI orders valued at $1.7B, and a robust $9B backlog in AI-related products. While there is acknowledgment that “catalysts are coming,” there is an evident sense of anticipation for the PC refresh cycle, which appears to be affecting revenue projections in the near term.

Based out of Round Rock, Texas, Dell Technologies operates primarily in the Computer Hardware sector. The company, whose segments include Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG), focuses on an array of solutions, products, and services across the Americas, Europe, the Middle East, Asia, and beyond. ISG is known for its storage solutions, servers optimized for general-purpose and AI applications, networking products, and a range of services. Meanwhile, CSG delivers desktops, notebooks, and associated electronics like displays and audio devices, along with various third-party software and peripherals.

With a market capitalization of approximately $70.04 billion and a 52-week share price range of $86.93 to $179.70, Dell Technologies opened the trading day at $93.00.

The trailing Price to Earnings (P/E) ratio for Dell Technologies stands at 14.63, with a forward P/E ratio projected at 9.93. When it comes to shareholder returns, Dell dispenses a dividend rate of $2.1 complemented by a yield of 2.2%, working out to a payout ratio of roughly 27.90%.

Dell Technologies holds the interest of both insiders and institutional investors, with respective holdings at approximately 11.61% and 73.68%. Analysts currently suggest an average target price of $139.88, paired with a modest Buy consensus based on 23-opinion data. This reflects a cautiously optimistic stance on Dell's market performance in the foreseeable future.

In summary, the recent adjustment of Dell's price target by Loop Capital to $130 represents a tempered but still positive stance on the company's growth trajectory. Investors and analysts will be watching closely to see how the company navigates the evolving landscape of the PC market and capitalizes on its AI-related initiatives.