Daiwa Capital Markets upgraded DELL to “outperform”
Dell Technologies Inc (NYSE:DELL) stock is 1.6% higher in premarket trading, looking to open above the $70 level following a bull note from Daiwa Capital Markets.
The analyst upgraded the computer stock to “outperform” from “market perform” and hiked its price target to $80 from $50 — a 16% upside from last night’s close — with potential tailwinds coming from artificial intelligence (AI). In its note to clients, Daiwa analysts said that AI sales “are ‘ramping,'” which could increase “long term growth potentials.”
Coming into today, covering brokerages were already overwhelmingly bullish on DELL, with nine of 12 recommending a “buy” or better. Meanwhile, the average 12-month target price of $68.50 is a slim 0.9% discount to the security’s current perch.
At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.12 puts have been picked up for every put in the past two weeks, a ratio that stands in the elevated 89th percentile of annual readings. In other words, options traders were much more bearish on Dell Technologies stock over the last two weeks.
Now looks like a good time to bet on the equity’s next move with options, as it is seeing attractively priced premiums at the moment. This is per DELL’s Schaeffer’s Volatility Index (SVI) of 28%, which stands in the 15th percentile of its annual range. What’s more, DELL’s Schaeffer’s Volatility Scorecard (SVS) sits at a relatively high 73 out of 100. In other words, the security has exceeded options traders’ volatility expectations over the past year.
Dell Technologies stock is on track to reclaim its Sept. 11 record peak of $72.82, as well as support from its 10-day moving average. This follows a post-earnings bull gap on the charts that propelled the shares above its early 2022 all-time highs. Year on year, DELL is up 82.2%.