By Peet Serfontein & Khumbulani Kunene
We initiate a long position with a target price of $138.00 and a stop-loss of $101.00 (Risk/reward ratio 1:9.0).
Dell Technologies is a leading multinational technology company specialising in computer hardware, software, and IT services. The company offers storage solutions, personal computers, servers, and networking equipment, with a strong emphasis on cloud-based and edge computing solutions.
Dell serves consumers, businesses and government organisations worldwide and competes aggressively with companies such as HP, IBM, Lenovo and Cisco. Dell operates in over 180 countries, with a strong presence in North America and Europe.
Technically, the stock appears to be undervalued compared to its peers, which presents a promising investment opportunity for the stock (see the insert on the main chart). An improvement in sentiment or fundamental strength presents an opportunity for potential upside for value investors. The stock is trading at a much lower valuation than peers and is expected to see significant growth medium term, which is supportive of our view.
A price action testing the 50% Fibonacci retracement level of around $108.00 also supports a bullish case for the stock. This indicator is considered a significant retracement and acts as strong support in an uptrend. A price bouncing at this level suggests that there is potential buying interest, reaffirming a bullish outlook.
Fading downside price momentum per the MACD indicator, as well as the upward trajectory of the on-balance volume (OBV) indicator, supports our bullish view.
| Share Information | |
|---|---|
| Share Code | DELL US |
| Industry | Technology Hardware & Equipment |
| Market Capital (USD) | 78.1 billion |
| One Year Total Return | 30.59% |
| Return Year-to-Date | -2.92% |
| Current Price (USD) | 111.44 |
| 52 Week High (USD) | 179.70 |
| 52 Week Low (USD) | 80.49 |
| Financial Year End | February |
| While underperforming relative to peers, the stock has achieved strong double-digit growth over the past 12 months, reflecting resilience in the price. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (USD) | 7.13 | 7.84 | 9.30 | 10.53 |
| Growth (%) | 9.90 | 18.68 | 13.18 | |
| Dividend Per Share (USD) | 1.48 | 1.75 | 1.94 | 2.05 |
| Growth (%) | 18.04 | 11.22 | 5.66 | |
| Forward PE (times) | 11.93 | 10.53 | 10.59 | |
| Forward Dividend Yield (%) | 1.57 | 1.74 | 1.84 | |
| Earnings are expected to achieve double-digit growth over the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | AMGN US - Take profit (Close the position) |
MPWR US - Buy (Continue to hold) |
TDG US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 267.10 | 617.57 | 1 292.86 |
| Current | 307.81 | 699.03 | 1 361.37 |
| Movement | +15.2% | +13.2 | +5.3% |
| The share price has reached the profit target, and we suggest closing the trade to reduce portfolio exposure. |
A gap in the price of the stock remains of interest. Remains sandwiched between its 200-week and 200-day simple moving averages. Upside price momentum is supportive.
Our profit target remains at $788.00 with a trailing stop-loss at $633.30. Exit the strategy by 2 April 2025. |
A smaller steep upward tilting inclining channel pattern remains of interest. Remains just above its 200-day simple moving average. Upside price momentum is supportive.
Our profit target remains at $1 500.00 with a trailing stop-loss at $1287.00. Exit the trade by 14 February 2025. |
| Share Name and Position | DOV US - Buy (Continue to hold) |
CHTR US - Buy (Continue to hold) |
STE US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 194.48 | 340.26 | 217.20 |
| Current | 202.64 | 350.92 | 223.36 |
| Movement | +4.2% | +3.1% | +2.8% |
|
Some seasonal trends in the price of the stock remains of interest. Remains above its 200-day simple moving average. The start of upside price momentum is supportive.
Our profit target remains at $214.00 with a trailing stop-loss at $195.00. Exit the trade by 9 May 2025. |
A price in a developing symmetrical triangle pattern remains of interest. Remains just above its 200-day simple moving average. Downside price momentum halted, which is supportive.
Our profit target remains at $390.00 with a trailing stop-loss at $324.70. Exit the trade by 30 May 2025. |
An Elliott wave price that is forming a trough remains of interest. Testing its 200-day simple moving average. Upside price momentum supports the trade strategy.
Our profit target remains at $239.00 with a trailing stop-loss at $208.00. Exit the trade by 18 April 2025. |
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