Dell Technologies (NYSE:DELL) shares were seen whipsawing in early Thursday trade after the IT company outlined its mid-term financial guidance during today’s Analyst Day.
Some of the key announcements include an increase in the company's share repurchase authorization, an increase in its annual capital return target, and a commitment to grow the dividend.
Dell sees annual revenue growth of 3-4% and an increase in its non-GAAP diluted earnings per share target of 8% annual growth or better over the long term.
Additionally, the company expects net income to adjusted free cash flow conversion of 100% or better and intends to return more than 80% of adjusted free cash flow to shareholders through a combination of share repurchases and dividends.
"We are incredibly well positioned for this next wave of technology expansion, growth and progress," said Michael Dell, chairman and chief executive officer, Dell Technologies.
"Whether it's workplace solutions, multicloud, intelligence at the edge, or AI and now GenAI – all of it takes a whole lot of what we offer. And with leading positions in so many areas, we have even greater conviction in our ability to deliver sustained value creation for all shareholders for years to come."
Furthermore, Dell plans to enhance its financial strategies by increasing its existing share repurchase authorization by an additional $5 billion, supplementing the remaining authorization of the current $5 billion plan.
The company also anticipates a quarterly dividend growth rate of 10% or more annually through fiscal 2028.
"We have a unique operating model, generating $42 billion in cash flow from operations over the last five years," said Yvonne McGill, chief financial officer, Dell Technologies.
"Looking forward, we can achieve consistent GDP+ revenue growth over time by leveraging our strengths to extend our leadership positions and capture new growth opportunities."
Goldman Sachs analysts urged their clients yesterday to buy Dell shares ahead of today’s event.