Raymond James Gives Thumbs Up To Dell's Debt Restructuring

Raymond James said in a new report that it views Dell Technologies Inc. DELL's debt restructuring as favorable and believes the refinancing has contributed to the company’s stock price rise of more than 30 percent since late January.

The Analyst

Raymond James analyst Simon Leopold maintained an Outperform rating on Dell with a $64 price target. 

The Thesis

Dell’s announcement that it has completed the private offering of $4.5 billion in notes is favorable because it pushes out maturities to 2024, 2026 and 2029, Leopold said in a Thursday note. 

The proceeds from the sale of the notes was used to pay down other debt. The restructuring came with some one-time costs and higher interest expenses, reducing FY 2020 diluted EPS guidance by 13 to 15 cents.

Raymond James’ sales and expense assumptions remain the same for the company.

Dell returned to being a public company in December after having gone private in 2013. Its valuation is complicated, Leopold said, by the complex way it came back to the public market: buying back the tracking shares of VMware, Inc. VMW, the software business in which Dell owns an 80-percent stake.

Price Action

Dell shares were down 1.81 percent at $59.62 shortly before the close Friday. 

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