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Dell Technologies ((DELL - Free Report) ) is well-positioned for the second-half of this year, according to Morgan Stanley analysts.
But the company is expected to guide below analyst and investor expectations for fiscal year 2026 (begun in February) as the near term is predicted to be not just "choppy" but also "tricky," the MS analysts wrote in a note on Thursday.
Followers of Zacks already knew this when DELL slipped into the cellar of the Rank earlier this week. More importantly, the Zacks Rank was negative on the stock after their late November Q3 earnings miss and guidance when the stock gapped down 12% from $142 to $124.
What's the Worry in the Datacenter Bull Market?
After the company's Q3 report, all eyes are on the delivery of Q4 results expected 2/27.
Apparently, analysts expect a downward revision to earnings per share guidance for fiscal year 2026, plus year-over-year margin pressure in the Infrastructure Solutions Group for the period.
Additionally, with lots of AI buildout goodness "priced-in" to these stocks, some analysts are expecting limited near-term upside for AI growth due to the well-known transformation in datacenters especially.
Morgan Stanley said it expects Dell's management to guide fiscal year 2026 revenue between $101 billion and $103 billion and non-GAAP EPS of $8.30 to $8.70, which is below consensus and their expectations.
But the i-bank analysts remain optimistic, with an updated forecast of $104 billion in revenue and $9.45 in EPS as still realistic for fiscal year 2026.
Just the same, the Morgan Stanley team decided to cut its price target on Dell shares to $128 from $154 while keeping its Overweight rating.
Bottom line: After a nice pause and pullback near $110, it seems DELL offers some degree of relative value here. Even though their next report will be full of potential surprises and volatility, it looks like risk as been greatly reduced already, giving datacenter-savvy investors a chance to play the upside with favorable odds.
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Bear of the Day: Dell Technologies (DELL)
Dell Technologies ((DELL - Free Report) ) is well-positioned for the second-half of this year, according to Morgan Stanley analysts.
But the company is expected to guide below analyst and investor expectations for fiscal year 2026 (begun in February) as the near term is predicted to be not just "choppy" but also "tricky," the MS analysts wrote in a note on Thursday.
Followers of Zacks already knew this when DELL slipped into the cellar of the Rank earlier this week. More importantly, the Zacks Rank was negative on the stock after their late November Q3 earnings miss and guidance when the stock gapped down 12% from $142 to $124.
What's the Worry in the Datacenter Bull Market?
After the company's Q3 report, all eyes are on the delivery of Q4 results expected 2/27.
Apparently, analysts expect a downward revision to earnings per share guidance for fiscal year 2026, plus year-over-year margin pressure in the Infrastructure Solutions Group for the period.
Additionally, with lots of AI buildout goodness "priced-in" to these stocks, some analysts are expecting limited near-term upside for AI growth due to the well-known transformation in datacenters especially.
Morgan Stanley said it expects Dell's management to guide fiscal year 2026 revenue between $101 billion and $103 billion and non-GAAP EPS of $8.30 to $8.70, which is below consensus and their expectations.
But the i-bank analysts remain optimistic, with an updated forecast of $104 billion in revenue and $9.45 in EPS as still realistic for fiscal year 2026.
Just the same, the Morgan Stanley team decided to cut its price target on Dell shares to $128 from $154 while keeping its Overweight rating.
Bottom line: After a nice pause and pullback near $110, it seems DELL offers some degree of relative value here. Even though their next report will be full of potential surprises and volatility, it looks like risk as been greatly reduced already, giving datacenter-savvy investors a chance to play the upside with favorable odds.