By Nate Wolf

Analysts at Citi raised price targets for Dell Technologies and HP Inc. ahead of the companies' earnings reports but cautioned that the enterprise hardware market could face headwinds through the rest of the year.

Citi maintained its Neutral rating on HP and lifted its price target to $29 from $25. The hardware company, which closed at $28.78 on Thursday, reports earnings for its fiscal second quarter on May 28.

Dell received a more bullish outlook.

Citi analysts reiterated a Buy rating on Dell and raised its target price to $128 from $105. Shares ended at $110.87 on Thursday. Dell reports earnings for its fiscal first quarter on May 29.

The company's "broad exposure, size and scale should enable its outperformance of broader IT spending trends," the analysts wrote in a research note Thursday.

Upcoming hardware and storage earnings, which also include Pure Storage and NetApp, may get a boost after customers pulled forward purchases to avoid sweeping U.S. tariffs. A brightening U.S. growth forecast also may help, Citi analysts said.

But trouble still remains for the hardware market while tariff fears and economic uncertainties loom. Citi noted that enterprises, which typically have fixed IT budgets, may be reluctant to increase spending should hardware prices rise.

Dell, though, is well-positioned to withstand those pressures.

"The company's lean inventory, just-in-time manufacturing, and diversification in supply chain to Mexico and other regions suggest they should be able to adapt to the changing dynamics more rapidly than their peers," Citi analysts wrote.

Dell stock has fallen 24% over the last 12 months, while HP shares have declined 7.7%.

Write to Nate Wolf at nate.wolf@barrons.com

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May 16, 2025 07:56 ET (11:56 GMT)

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