Dell’s Q3 Earnings Preview: Market Expert Says ‘It’s All About That Guidance’
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Dell Technologies (NYSE:DELL) Shares are up more than 90% so far this year, and investors will be hoping for the winning streak to continue when the company reports third-quarter financial results after the market closes on Tuesday.
Earnings estimates: Analysts expect Dell to post third-quarter revenue of $24.65 billion, up from $22.25 billion in the third quarter of last year, according to data from Benzinga Pro.
The company has surpassed analyst estimates for revenue in three consecutive quarters and in eight of the last 10 quarters overall.
Analysts expect Dell to report third-quarter earnings per share of $2.05, up from $1.88 in the third quarter of last year. The company has surpassed analyst estimates in 10 consecutive quarters.
Trend:
What the experts say: Dell shares have recovered since falling below $90 three months ago, but remain off highs, says the chief global strategist at Freedom Capital Markets. jay woods he wrote in his weekly newsletter.
“Dell Technologies stock took a big hit two quarters ago and has never recovered to that point,” Woods said.
Woods said Dell’s quarterly report is more about forward-looking commentary than third-quarter results.
“It’s about that guide.”
With Dell shares rising in recent months, Woods said the long-term strength of the trend could be tested by a negative reaction.
“Watch the falling moving averages to see if they hold the $120 to $125 area. If stocks go down, it may take months to get back to normal.”
If the report is positive, Woods anticipates minor resistance at $150, seeing “calm skies down to $160” once that level is broken. Woods indicated that, with solid results and forecasts, it is also possible to return to the historical highs reached in May.
Below are some other recent analyst ratings on Dell Technologies and their price targets:
Evercore ISI: Repeated Outperform Rating with $150 Price Target.
Well Fargo: Maintained Overweight rating and raised price target from $140 to $160.
Morgan Stanley: Maintained the Overweight rating and raised the price target from $136 to $154.
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Key elements to keep in mind: Like many other technology companies, Dell’s results could emphasize the importance of AI growth in the future.
“Our AI momentum accelerated in the second quarter and we’ve seen an increase in the number of enterprise customers purchasing AI solutions each quarter,” said Dell’s COO. Jeff Clarke he said after second-quarter results.
Clarke said demand for AI-optimized servers was $3.2 billion in the second quarter, up 23% from the first quarter. The company’s AI-optimized server portfolio was $3.8 billion at the end of the second quarter.
“And our pipeline has grown to several multiples of our order book.”
Investors and analysts will be watching to see if this segment increased its order book and posted quarter-over-quarter revenue growth once again.
Client Solutions Group could be another area to watch, with second-quarter segment revenue of $12.4 billion, down 4% year over year.
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This article Dell’s Q3 Earnings Preview: Market Expert Says ‘It’s All About That Guidance’ originally appeared on Benzinga.com
