Investing.com -- Dell Technologies (NYSE:DELL) reported Thursday better-than-expected first-quarter results, though performance was held back by a challenging economic backdrop as PC demand weakness persists.
Dell Technologies shares were down 3% in early Friday trading.
The company reported first quarter adjusted EPS of $1.31 on revenue of $20.9 billion, compared with estimates for $0.86 per share and $20.3B, respectively.
The beat on the bottom line comes even as margins and revenue fell amid a weaker backdrop for PC demand.
Dell's client solutions group and infrastructure solutions group business saw revenue fall 23% and 18% respectively amid "challenging economic backdrop," the company said.
Dell guided for Q2 revenue of $20.7B at the midpoint of the range, worse than the Street at $21.1B.
Goldman Sachs analysts highlighted a weak recovery in Dell's core PC business.
"Although DELL increased its F2024 EPS guidance by $0.20 at the mid-point, this only represents a partial flow-through of the ~$0.51 beat relative to the mid-point of DELL’s F1Q24 guidance," the analysts said.
Deutsche Bank analysts raised the price target by $3 to $48 per share on the Buy-rated DELL stock.
"Considering a tough macro environment suggested by other IT hardware peers, we are not too surprised by DELL's cautious comments in the near term, and we view a delayed recovery as reasonable," the analysts wrote in a client note.
"We continue to believe DELL's guidance is more de-risked, and with the stock trading at ~7x CY24E EPS, we believe the risk-reward is attractive."
Additional reporting by Senad Karaahmetovic