Dell Stock Draws Mixed Analyst Reactions Before Earnings

The security will report first-quarter earnings after tomorrow's closing bell

Digital Content Manager
May 25, 2022 at 10:27 AM
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Dell Technologies Inc (NYSE:DELL) is attracting analyst attention this morning. Evercore ISI earlier added the tech name to its “Tactical Outperform” list, citing upbeat IT demand trends that the firm believes will drive Dell to post a first-quarter earnings beat when it steps into the confessional after the market close tomorrow, May 26. J.P. Morgan is not as optimistic, cutting DELL's price-target to $60 from $68 before the event.

Last seen up 3.4% to trade at $42.28, Dell Technologies stock has struggled since its Feb. 10, all-time high of $61.54. The shares are now bouncing off a pullback to the $38 area, though the 30-day moving average lingers above as resistance. Year-to-date, the security is down 25.2%.

Dell Technologies stock has finished four of eight post-earnings sessions higher in the last two years, including an 8.9% jump in May 2020. This time around, options traders are pricing in a 10.2% swing for DELL after earnings, which is much higher than the 4.5% move it averaged following its last eight reports, regardless of direction.  

The options pits lean bearish on DELL, per the equity's 10-day put/call volume ratio of 2.68 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 98% readings from the past 12 months. This means there has been a healthier-than-usual appetite for puts of late.

Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.97 ranks in the 94th percentile of its 12-month range, indicating short-term options traders are now operating with a heavy put-bias. 

Ahead of the known event, it's not surprising that Dell's short-term options are fetching a pretty penny. The stock's Schaeffer's Volatility Index (SVI) of 54% stood in the highest percentile of its annual range, as of last night's close. In addition, the security's Schaeffer's Volatility Scorecard (SVS) sits at an elevated 86 out of 100, indicating the equity has exceeded option traders' volatility expectations in the past year.

 

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