Industry majors from Intel Corp to Lenovo Group have predicted a slowdown in PC sales in 2022 as runaway inflation cools demand after a two-year pandemic boom.
But with nearly half of its revenue coming from enterprise sales, Dell is poised to benefit from a trend of companies upgrading their equipment for the hybrid-work era.
"There is an ongoing shift to more enterprise-driven PCs and they also command higher margins," said CFRA analyst Angelo Zino.
GRAPHIC: Dell's commercial sales boomed during the pandemic
CONTEXT
China's Lenovo - the world's largest maker of personal computers - earlier in August posted its slowest revenue growth in more than two years, while Samsung Electronics warned chip demand from PC makers would weaken further.
But global commercial shipments of desktops, notebooks and workstations are estimated to jump 16% sequentially in the third quarter, according to research firm Canalys, after a rise of 6.4% in the previous three months.
Still, Dell could face pressure from a stronger dollar, supply-chain disruptions sparked by recent COVID-19 flare-ups in China and the Russia-Ukraine war, analysts said.
GRAPHIC: Commercial PC shipments will continue to grow
FUNDAMENTALS
* Analysts expect Dell's second-quarter revenue to rise 1.4% to $26.49 billion when it reports results on Aug. 25
* Earnings per share is estimated to be $1.64
* The stock has lost nearly 17% of its value this year, compared with a 11.3% fall in smaller rival HP Inc
WALL STREET SENTIMENT
* 13 of 20 analysts rate the stock "buy" or higher, while 7 have a "hold" rating
* The median price target is $59 vs $60 three months ago
* Dell trading at $46.86 currently
QUARTER REFINITIV IBES ACTUAL BEAT, MET,
ENDING ESTIMATE MISSED
Apr. 30 2022 1.39 1.84 Beat
Jan. 31 2022 1.95 1.72 Missed
Oct. 31 2021 2.18 2.37 Beat
Jul. 31 2021 2.03 2.24 Beat
Apr. 1.61 2.13 Beat
30 2021
Jan. 31 2021 2.12 2.70 Beat
Oct. 31 2020 1.40 2.03 Beat
Jul. 31 2020 1.40 1.92 Beat
(Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)
By Eva Mathews
