Important points
Dell is scheduled to report its third-quarter results after the market closes on Tuesday, and analysts expect sales and profits to increase from a year ago, but the stock price won’t rise any further.
Of the 10 analysts covering the stock tracked by Visible Alpha, eight have a buy or equivalent rating, and two have a hold rating. However, their consensus price target of $145 means an increase of less than 1% from Friday’s closing price.
Wall Street reported that Dell’s third-quarter sales rose 11% from a year earlier to $24.68 billion, with net income of $1.02 billion ($1.42 per share), compared to $1.0 billion ($1.42 per share) in the same period last year. It is expected to increase from $1.36 per share.
Analysts at Morgan Stanley told clients in a note Thursday that Dell’s third-quarter profit “doesn’t look like there’s much upside” but that the company expects to see more growth in 2025 with its artificial intelligence (AI) servers. He suggested that there is potential for growth. Dell makes servers that use Nvidia (NVDA) AI chips, and the chipmaker drew rave reviews during Wednesday’s earnings call.
For now, “unseasonal PC market trends” and “flat” quarter-on-quarter growth in AI servers could hinder results, analysts said. Morgan Stanley rates Dell with an “overweight” rating and a price target of $154.
Dell stock has risen nearly 90% since the beginning of the year, closing at $144.21 on Friday.
