Investing

Earnings Previews: Deere, Dell, HP, Nordstrom

Dell

Over the past 12 months, shares of Dell Technologies Inc. (NYSE: DELL) have added about 59% to their share price. The company reports results after markets close Tuesday.

Global PC shipments rose a meager 1% in the third calendar quarter, according to Gartner, but Dell shipments rose by 26.5%. The company’s market share edged jumped by 3.6 percentage points to 18.1%, moving it closer to number-two-ranked HP’s 20.1% share. Gartner attributed Dell’s October-quarter growth to its “limited focus in the consumer market.” The company shipped more than 15 million computers in the quarter, the first time it’s ever broken through that level.

Sentiment among analysts is bullish, with 13 of 19 brokerages giving the stock a Buy or Strong Buy rating and another five rating it at Hold. At a share price of around $55.10, the upside potential based on a median price target of $65, is 18%. At the high price target of $76, the upside potential is 38%.

The consensus revenue estimate for Dell’s third quarter of fiscal 2022 is $27.34 billion, up 4.6% sequentially and 16.2% year over year. Adjusted EPS are forecast at $2.30, up 2.8% sequentially and 13.3% year over year. For the full year ending in January, analysts are looking for EPS of $8.05, up less than 1%, on sales of $103.61 billion, up 9.8%.

Dell’s share price to earnings multiple for fiscal 2022 is 6.8. For fiscal 2023, the multiple to estimated EPS of $6.92 is 7.9, and for 2024, it is 7.5 times estimated EPS of $7.29. The stock’s 52-week range is $34.09 to $58.29. Dell does not pay a dividend. Total shareholder return for the past year is 59.1%.

HP

Personal computer and printer maker HP Inc. (NYSE: HPQ) has added more than 60% to its share price over the past 12 months. Supply chain and logistical issues have tossed a wrench into the demand generated by the pandemic for more computers for working from home. As the economy opens up, that demand may soften even more. HP is trying to build a services business around the PCs it shipped through the first half of this year. The company reports quarterly results after markets close on Tuesday.

Analysts have been cautious on the stock. Of 18 brokerages covering it, eight have rated the stock a Hold, while six have a Buy rating on the shares and four rate it at Strong Sell. At a share price of around $32.10, the stock trades virtually at its median price target of $32.00 At the high price target of $50, the upside potential is more than 55%.