Dell Technologies Faces Market Challenges Despite Strong Analyst Support

Founded in 1984, Dell Technologies Inc. (DELL) is based in Round Rock, Texas. The company designs, develops, manufactures, markets, sells, and supports a range of integrated solutions, products, and services both in the Americas and globally. Dell has a market capitalization of $64.4 billion and operates through two main segments: Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).

As a large-cap stock, DELL holds significant stature in the computer hardware industry. Its market cap surpasses the $10 billion threshold, marking it as a major player in the market and enhancing its influence.

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However, DELL is currently facing difficult market conditions. The stock is trading approximately 47% below its 52-week high of $179.70, reached on May 29 of last year. Over the past three months, DELL’s shares have decreased by 18.2%, significantly underperforming the Technology Select Sector SPDR Fund (XLK), which declined by 9.7% in the same period.

Reviewing the longer-term performance, DELL has dropped 16% in the past year, again lagging behind XLK which fell by 5.6%. Over the last six months, DELL’s shares have decreased by 19.5%, contrasting with XLK’s modest loss of 1.3%.

From a technical perspective, DELL currently remains in a downtrend. The stock has been trading below its 50-day moving average since late February and below its 200-day moving average since early January.

Following its Q4 earnings release on February 27, DELL shares fell by 6.8%. The company reported a $23.9 billion revenue, reflecting a 7% growth, and highlighted strong potential to expand its AI offerings. Additionally, DELL’s earnings per share (EPS) of $2.42 exceeded Wall Street estimates by 4.8%.

Meanwhile, HP Inc. (HPQ), a competitor, faces similar challenges. Its shares have experienced a 20.8% drop over the past six months and a 5.7% decline over the last year.

Despite these headwinds, analysts maintain a positive outlook on DELL’s future. The stock holds a consensus “Strong Buy” rating from 21 analysts, with a mean price target of $137.64, suggesting a potential upside of 44.4% from its current trading levels.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

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