Goldman Sachs (NYSE:GS) has initiated coverage in US-based technology hardware group Dell Inc. (NASDAQ:DELL), alongside competitor Hewlett-Packard Enterprise Company.
Analysts at the multinational investment bank believe Dell should benefit from an “improvement in investor sentiment over the next 12 months” as pricing estimates “approach a cyclical bottom” in Dell’s diversified lines of personal computers, servers and data storage, all the while benefitting from a “leading market share” position.
Goldman Sachs (NYSE:GS) noted Dell’s cheap seven to eight times price-to-earnings ratio, low-single-digital revenue growth and mid-single-digit earnings-per-share (EPS) growth.
Dell is known for its “shareholder-friendly” capital returns comprising up to 100% of free cash flows, noted Goldmans.
Earlier this month, Dell hiked its dividend after reporting record full-year operating income, although the group did warn on the outlook.
US$3.8bn was returned to shareholders in the fiscal year 2023 through share repurchases and dividends.
Dell said it expects first-quarter revenue for the current year to be "seasonally lower than average", down roughly 17% to 21%, while full-year 2024 revenue is expected to fall between 12% and 18%.