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Investing.com - UBS raised its price target on Dell (NYSE:DELL) to $186.00 from $155.00 on Wednesday, while maintaining a Buy rating on the stock. The new target represents significant upside potential from Dell’s current trading price of $163.12, with the company now commanding a market capitalization of $109.22 billion.
The price target increase represents a 20% boost, driven by UBS’s expectation of sustainable 20% to 25% growth in AI server revenue without significant operating margin degradation. According to InvestingPro data, Dell has demonstrated strong momentum with a remarkable 110% price return over the past six months, while maintaining a GOOD overall financial health score.
Dell has increased its long-term revenue growth target to 7%-9%, exceeding UBS’s previous 6%-8% expectations, and raised its earnings per share growth forecast to 15+%, surpassing the firm’s prior 10+% projection.
UBS now forecasts a long-term EPS compound annual growth rate of at least 12%, which is 500 basis points faster than its previous 7% target, addressing some AI margin concerns that had affected Dell’s multiple.
The firm also views Dell’s Client Solutions Group (CSG) revenue target of 2%-3% growth as a modest positive, particularly given recent share losses and a Windows 11 cycle that is approximately 50% complete.
In other recent news, Dell Technologies announced an increase in its long-term financial targets, raising its annual revenue growth target to 7-9% from the previous 3-4% and nearly doubling its annual non-GAAP diluted earnings per share growth target to 15% or better. The company also extended its commitment to grow its quarterly dividend by 10% or more annually through fiscal 2030. Additionally, Dell completed a $4.5 billion senior notes offering, which included four tranches with varying maturity dates and interest rates. This offering is part of Dell’s broader financial strategy, with the notes guaranteed by Dell Technologies and its subsidiaries.
Mizuho recently raised its price target for Dell to $170 from $160, maintaining an Outperform rating, citing strong artificial intelligence momentum in the Enterprise and Sovereign AI segments. Melius Research also increased its price target to $200 from $172, maintaining a Buy rating due to Dell’s potential for faster-than-anticipated earnings per share growth driven by enterprise AI adoption. Meanwhile, Raymond James reiterated its Outperform rating with a $152 price target, noting that AI-related activity has significantly exceeded forecasts. These developments reflect Dell’s strategic focus on AI and financial growth.
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