Bank Of America Sees Dell Stock Price Climbing To $63


Bank of America Merrill Lynch has put a “Buy” rating on Dell Technologies’ new stock, which hit the public market on Dec. 28, projecting that the price per share to climb to $63.

The Round Rock, Texas-based infrastructure giant went public last week through a VMware stock swap deal, debuting on the New York Stock Exchange at $46 per share under the ticker symbol “DELL”.

The DELL stock reached a high of $49.10 per share but has hovered around $47 per share this week. The stock price is currently at $46.22 per share as of Friday morning.

The multinational investment bank said in a recent note that positive factors that spurred the “Buy” rating include Dell’s strategically aligned family of businesses that hedges risk of disruption from cloud and allows for cross selling opportunities.

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[Related: 5 Things To Know About The New Public Dell And Dell’s Stock]

Dell Technologies consists of a slew of companies and products that range from the edge, to core computing systems, to cloud. Dell sells servers, storage, PCs, and hyper-converged infrastructure, while the company is also the majority owner of virtualization superstar VMware. The $80 billion company additionally includes security vendors RSA and SecureWorks, cloud-native application software specialist Pivotal Software, cloud integrator and workflow automation provider Boomi, and cloud management provider Virtustream.

Dell Technologies CFO Tom Sweet recently told CRN that Dell will “accelerate” technology integrations with VMware as a public company, which is expected to help sales.

"You look at the number of solution workstreams that we have going right now with VMware -- whether it's around hyper-converged infrastructure or Workspace ONE in our client space, or around what we're doing with vSAN and vSAN Ready Nodes – so across the spectrum, you're going to see us accelerate a number of these integrated solutions. We're optimistic and excited about it," said Sweet.

Bank of America Merrill Lynch also cited Dell’s strong position in the server market as a key factor for its “Buy” rating. Dell has overthrown Hewlett Packard Enterprise as the worldwide market share leader in servers. In the third quarter of 2018, Dell generated $4.09 billion in server sales, up 33 percent year over year, representing 17.5 percent global market share.

Another reason the investment bank has high hopes for Dell’s stock is its strength in the PC market and potential for higher margin storage sales through product simplification.

Last year, Dell redrew the battle lines in the storage market with a revamped go-to-market and solutions strategy that includes fewer product lines. Dell is currently the worldwide leader in storage with plans for a new mid-range storage market assault later this year.

Dell Technologies CEO and founder Michael Dell told CRN that 2018 was his company’s “best year ever” with no plans on slowing down as a public entity in 2019.

“If you look at our data center business, we are the largest and we’re bigger than Cisco. Bigger than IBM. Bigger than HPE,” said Dell. “So if you step back and think about it in hindsight, what we’ve done is we combined the leading storage company with the leading server company, which created the leading hardware infrastructure company, and we combined that with the leading software infrastructure company. So now you’ve got the essential infrastructure company.”