Dell Analysts React To Q2 Earnings Beat: 'Ride The Wave Of Remote Work'

Dell Technologies Inc DELL shares were moving higher Friday after the computing company reported a second-quarter earnings beat. 

Dell reported quarterly EPS of $1.92 on revenue of $22.77 billion after the close Thursday. Both numbers beat consensus analyst expectations of $1.39 and $22.52 billion, respectively. Revenue for the quarter was down 2.9% year-over-year. 

Dell said its consumer and enterprise businesses were particularly strong, offsetting weakness in small-business customers due to the pandemic.

Several analysts weighed in on Dell stock after the print. 

Favorable Mix Shifts: Raymond James analyst Simon Leopold said Dell reported favorable product mix shifts and is moving in the right direction.

“Commercial PCs face challenges as enterprises continue to budget conservatively, yet Servers and Storage revenue exceeded our expectations,” the analyst said in a note. 

Credit Suisse analyst Matthew Cabral said the tough macroenvironment will likely continue to weigh on Dell’s growth.

“While Dell’s headline EPS was impressive, underlying CSG/ISG performance was less inspiring and we remain wary of a challenging Enterprise spending environment ahead,” he said. 

Work-From-Home Tailwinds: BofA Securities analyst Wamsi Mohan said Dell’s free cash flow is impressive; it is de-levering its balance sheet; and the work-from-home environment has created tailwinds for its business.

“Even though the macro environment presents near-term challenges, as the business continues to de-lever, we see continued upside from fundamentals over the next two years,” the analyst said. 

Morningstar analyst Mark Cash said Dell is executing well on cost management initiatives and is benefiting from a spike in remote work.

“Dell continues to ride the wave of remote work and learning even while it faces weaker demand in infrastructure and desktops,” Cash wrote.

DELL Ratings, Price Targets: Raymond James maintained an Outperform rating and lifted the price target from $54 to $69. 

• Credit Suisse has a Neutral rating and raised the target price from $54 to $60.
• BofA Securities reiterated Buy rating and lifted the price target from $70 to $75. 
• Morningstar has a Hold rating and $65 fair value estimate.

>DELL Price Action: Dell shares were trading 4.87% higher at $65.67 at last check Friday. 

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Photo courtesy of Dell.