Goldman Sachs’ Rod Hall: Dell shares could climb by 40%

Dell Technologies Inc (NYSE: DELL) has rallied about 35% in the stock market this year, making up for a good opportunity to take profit. But Goldman Sachs’ Rod Hall says it’s a good idea to hold it a bit longer.

Goldman Sachs adds Dell to its ‘America’s Conviction List’

In a note on Monday, Hall reiterated his ‘buy’ rating on the stock with a price target of $137 that represents an about 40% upside from here. Dell is now on Goldman Sachs’ ‘America’s Conviction List’.

The analyst sees multiple catalysts that could push the stock up in the near-term, including $9.5 billion in cash proceeds from the proposed spinoff of VMware expected to close in the final quarter of 2021, and another $4.0 billion from the pending Boomi sale.

This makes Dell Technologies “one of the best return opportunities in our coverage”.

Dell is ‘inexpensive’ at current levels

At $98 a share, Hall dubs Dell “inexpensive” at current levels. The technology company said last month it will use proceeds from the spin-off and free cash flow to pay down over $16 billion in debt.

As a standalone company, Hall estimates Dell to have roughly $12 billion in debt by the end of fiscal 2022.

Dell shares gained 4.0% today on Goldman Sachs’ bullish call.