Dell Technologies (DELL) likely faces a “tricky” earnings setup amid subdued near-term hardware spending, which could prompt the computer maker to guide April-quarter financial results below market consensus, Morgan Stanley said Wednesday.
Dell is scheduled to report fiscal Q4 results Feb. 29. Morgan Stanley projects adjusted earnings at $1.73 per share on revenue of $21.82 billion.
The company’s forward-looking outlook and artificial intelligence server backlog could see “some downside risk” in next week’s report, Morgan Stanley said in a note.
“This creates a tricky earnings setup, but we’re ultimately buyers on any post-earning weakness,” the brokerage said. “Eventual S&P 500 inclusion, new/notable AI server wins, and a return to PC market growth represent key stock catalysts we see over the 12 months.”
Morgan Stanley raised its price target on the Dell stock to $100 from $89 while reiterating its overweight rating, according to the note.