Dell, HP in danger as Bernstein predicts PC demand, costs fall in 2023 (NYSE:DELL)

Dell Applied sciences (NYSE:DELL) and HP (NYSE:HPQ) are in danger as funding agency Bernstein believes consensus estimates for the PC business are too excessive for 2023 and there could also be extra ache if a recession occurs.

Analyst Toni Sacconaghi forecast PC models to say no 8% in 2022-2023 to 268M models (and 272M in 2024), effectively beneath the forecast of business analysis companies like Gartner and IDC, which forecast between 280M and 300M models shipped subsequent yr.

The analyst defined that in the course of the pandemic, PC demand surged, however normalized, long-term demand development for the PC market is “flattish.”

“For main distributors like Dell and HP, consensus estimates (-5 to -6%) could also be too excessive if they aren’t in a position to seize share,” Sacconaghi wrote in a observe to purchasers.

Sacconaghi additionally forecast that the typical promoting value, or ASP, would decline subsequent yr as provide and demand catch up and there’s a “much less strong combine,” which in the end might result in PC business revenues falling by 10% or extra.

The analyst added that in a recessionary interval, there could possibly be “additional draw back,” noting that in the course of the Nice Monetary Disaster, PC development fell from excessive single digits to a decline of 20%.

Dell (DELL) shares have been little modified in premarket buying and selling, whereas HP (HPQ) was fractionally increased.

Earlier this month, Dell Applied sciences (DELL) was sued by Australia’s competitors company after the company claimed the corporate mislead customers over the price of add-on displays.