DELL

Dell Technologies Inc.

42.74
USD
-7.51%
42.74
USD
-7.51%
38.33 61.54
52 weeks
52 weeks

Mkt Cap 12.43B

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HP, Dell most at risk if China replaces foreign-branded PCs with domestic versions: Citi

HP Inc. (NYSE:HPQ) and Dell Technologies (NYSE:DELL) are the companies most at risk if China replaces foreign-branded personal computers with domestic alternatives, investment firm Citi said in a note. Analyst Jim Suva, who has buy ratings on both HP (HPQ) and Dell (DELL), noted that China accounts for roughly 55 million PCs, or 15% of total worldwide sales. Both companies contain significant chunks of the market, with HP (HPQ) and Dell (DELL) accounting for 10% and 12%, respectively. Conversely, Lenovo accounts for 40% of the domestic market. In addition, Suva noted that China accounts for between 8% and 10% of unit sales for both companies and while it would certainly be a headline risk for HP (HPQ) and Dell (DELL), it's possible the U.S. could "respond by putting more emphasis on local OEMs, where HP and Dell dominate with Lenovo at 10% share, to offset sales lost in China." The analyst also noted that there could be a continued change in the PC supply chain, moving to other regions such as Taiwan, India, Vietnam and Mexico to help "mitigate supply chain concentration risks." Earlier this month, Goldman Sachs highlighted HP (HPQ) as one of the top dividend growth and yield picks in the information technology space.

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