Dell to benefit from improving investor sentiment over the next 12 months – Goldman Sachs

By Sam Boughedda 

Goldman Sachs analysts started Dell Technologies (NYSE:) at Buy and HP Inc. (NYSE:) and Hewlett Packard Enterprise (NYSE:) at Neutral in a note to clients on Monday morning.

The analysts assigned a $43 per share price target to Dell, a $15 price target to HPE, and a $26 price target to HPQ.

They told investors that the companies make up a “substantial share of the PC, server, storage, printing, and enterprise networking markets” and should benefit from the shift toward enterprise investments in hybrid multi-cloud, the consumer and enterprise PC and printing replacement cycle demand and product innovation in higher-end PC segments and commercial, and more flexible consumption-based business models and new product innovation.

“We see opportunities to be selectively constructive and believe DELL should benefit from an improvement in investor sentiment over the next 12 months as estimates approach a cyclical bottom in a diversified portfolio of PCs, servers, and storage while benefiting from leading market share positions in nearly every category it operates in and having an attractive valuation as measured by P/E and FCF yield,” said the analysts.

Goldman Sachs’ Neutral rating on HP Inc. reflects the “limited visibility into the trajectory of the combined printing and PC markets with less clear upside from growth initiatives.”

Meanwhile, its outlook for Hewlett Packard Enterprise servers and storage is impacted by “normalizing supply chain & increasing enterprise IT budget scrutiny.”