By Senad Karaahmetovic
Evercore ISI analyst Amit Daryanani added Dell (NYSE:DELL) to Tactical Outperform List ahead of the company’s earnings report that is due tomorrow after market close.
The analyst believes the IT hardware giant saw “robust” demand trends in the previous quarter, which should translate into a beat and raise.
“In our view, DELL’s full year guide is a low bar as the company is using its LT framework as a guide (3-4% y/y topline and ~6% y/y for EPS) – this includes street modelling more severe than historical seasonality for July-qtr and beyond. Furthermore, we think the IT spend environment is stronger than the guided topline growth suggest and while supply chain is a wild card we think DELL is one of best supply chain companies globally to navigate these issues,” Daryanani said in a client note.
The analyst sees the potential of results coming in higher on both top and bottom line “due to a more constructive PC market despite global supply/logistical challenges and possible FX challenges.”
Overall, the analyst reiterates his view that the FY23 guidance is “extremely conservative given the strong demand for DELL’s key end markets.”
Dell shares are up over 1% today in pre-open Wednesday.