In a recent Zacks Ultimate Strategy Session, I was asked what sector in the market I thought would lead heading into the end of the year. The favorites of yesteryear like energy or tech were not my choice. Rather, I thought that consumer discretionary was going to lead the way. My thinking was that folks were overly bearish on the US consumer given that student loan payments were set to un-freeze. If there’s one thing about American’s you can’t ever question, it’s our propensity to buy cool stuff to make us feel better. A little retail therapy so-to-speak.
Today’s Bull of the Day is a stock that benefits from consumer spending, but it’s also an enterprise play. I’m talking about Zacks Rank #1 (Strong Buy) Dell Technologies (DELL). Dell Technologies Inc. designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services in the Americas, Europe, the Middle East, Asia, and internationally. The company operates through two segments, Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).
Image Source: Zacks Investment Research
The reason for the favorable Zacks Rank is the recent positive earnings estimate revisions coming from analysts. Over the last sixty days, two analysts have upped the ante for both the current year and next year. It’s pushed up our Zacks Consensus Estimate for the current year from $5.55 to $6.33 while next year’s number is up from $6.12 to $6.99.
The company has been on an absolute heater when it comes to earnings reports. Last quarter’s 61 cent beat was the latest in a line of earnings beats dating back six consecutive quarters. While the company has been beating, estimates continue to rise. Estimates bottomed out in Q2 2023. Since then, they’ve continued to move up. That has helped the stock move from lows under $40 to over $70 where it closed on November 8th.
— David Bartosiak
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Source: Zacks