There’s a buying opportunity in Dell Technologies , and investors should capitalize on it, according to Citi. Analyst Asiya Merchant initiated coverage of Dell with a buy rating, as well as a $60 price target, citing the technology company’s leadership in a category that’s “poised for recovery.” The analyst cited signs of early recovery in commercial PCs even as recovery in storage and compute remains uncertain. “We like Dell’s leading share in commercial PCs, return to normalized FCF margins which could drive an uptick in shareholder returns, reduction in core debt leverage, along with the potential for inclusion in the SP500 index an incremental catalyst,” Merchant said to clients in a Thursday note. “Estimates have also been significantly de-risked given a conservative guide.” DELL 1D mountain Dell shares 1-day Dell shares are higher by 32% this year. The stock is outperforming in a challenging market for tech hardware names, which are under pressure after their sharp rise during the pandemic. However, the analyst’s $60 price target implies the stock could rise another 12.9% from Thursday’s closing price. “Given significant correlation of stock price performance and EPS estimate revisions, we remain selectively biased towards those companies who 1) are strongly positioned towards those areas that are poised for recovery, 2) mix shift enabled margin expansion and 3) de-risked estimates,” Merchant wrote. —CNBC’s Michael Bloom contributed to this report.
