Evercore sees Dell stock gaining from TD SYNNEX PC outlook

Thursday - Evercore ISI, a prominent investment research firm, has indicated that Dell Technologies (NYSE:DELL) stands to benefit from the upbeat PC market commentary provided by TD SYNNEX Corp. (NYSE:SNX). The positive performance in TD SYNNEX’s core IT distribution business, which includes high single-digit year-over-year PC revenue growth, is viewed as a favorable sign for Dell and its industry peers.

In a recent statement, Evercore analysts highlighted the continued momentum in the PC refresh cycle and sustained demand in the cloud sector as key drivers for the IT market’s cautious optimism. This trend is expected to have a positive impact on original equipment manufacturers (OEMs) such as Dell and HP Inc. (NYSE:HPQ), given their roles in the production and distribution of PCs.

TD SYNNEX’s financial results revealed a 10% increase in PC adjusted gross billings, suggesting a robust demand environment for personal computers. This development is seen as particularly beneficial for Dell, which, as an OEM, directly contributes to the supply of PCs in the market.

The positive outlook from TD SYNNEX is also anticipated to reflect well on other companies within the industry ecosystem, including Ingram Micro (INGM) and CDW (NASDAQ:CDW), which is a wholesale partner. Ingram Micro, with annual revenue of $48 billion and currently trading near its 52-week low, appears undervalued according to InvestingPro analysis. Both firms are expected to experience favorable conditions due to their involvement in IT distribution and their relationships with TD SYNNEX.

The IT distribution sector’s health is often considered a bellwether for the broader technology industry, with companies like Dell being integral components of this ecosystem. While Ingram Micro’s gross profit margins remain relatively low at 7.2%, InvestingPro identifies it as a prominent player in the Electronic Equipment sector with multiple growth indicators. The current assessment by Evercore ISI suggests a promising outlook for Dell and its peers, based on the strong performance indicators from TD SYNNEX’s recent financial disclosures. For deeper insights into the IT distribution sector and comprehensive analysis of over 1,400 US stocks, including detailed Pro Research Reports, visit InvestingPro.

In other recent news, Ingram Micro reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.92 and revenue of $13.34 billion, reflecting a 2.5% year-over-year increase. The company also achieved a full-year net sales figure of $48 billion, maintaining stability compared to 2023. Analysts from BofA Securities maintained a Buy rating on Ingram Micro, citing continued strength in the Cloud sector and improving trends in client and endpoint solutions. Jefferies, while lowering the price target to $24 from $28, also kept a Buy rating, noting that despite some adjustments in financial projections, Ingram Micro’s valuation remains attractive. Evercore ISI adjusted its price target for Ingram Micro to $26, reflecting a revised forward twelve months EPS estimate. The company is experiencing growth in North America and the Asia-Pacific region, although competitive pressures in India and a shift in product mix are impacting margins. Ingram Micro’s strategic focus on digital transformation and cloud growth continues to drive its business, alongside efforts to optimize costs through restructuring initiatives.

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