This Dell Analyst Is Bullish Ahead Of Earnings: 'PC Market Has Likely Bottomed'

Shares of Dell Technologies Inc DELL spiked in the pre-market session on Tuesday, with the company scheduled to report earnings on May 25.

The PC market is likely to have bottomed, and a cyclical rebound has historically preceded outperformance in shares of Dell Technologies, according to Morgan Stanley.

The Analyst: Erik Woodring upgraded the rating for Dell Technologies from Equal-Weight to Overweight, while raising the price target from $45 to $55.

The Thesis: A rebound in the PC market is “closely correlated” to revenue growth in Client Solutions Group (CSG), Woodring said in the upgrade note.

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“DELL's management has been ultra-conservative in guidingFY24, which limits negative earnings revisions risk,” the analyst wrote. “We believe management is hyper-focused on accelerating shareholder returns, which our analysis shows increases the odds of outperformance vs. peers."

Dell’s stock has an attractive valuation, after it underperformed the S&P 500 over the past year, Woodring further stated.

DELL Price Action: Shares of Dell Technologies had risen by 3.13% to $45.19 in the pre-market on Tuesday.