Goldman Sachs said investors should have faith in Dell despite short-term challenges. Analyst Michael Ng started his coverage of Dell with a buy rating. His $43 price target implies that the stock is up 15.5% over the next year from Friday’s closing price. The weakening in the trend in personal computer demand is creating headwinds, but he says those will subside soon. That’s because six-quarters of computer demand has been weak, and the typical cycle takes four to six quarters to bottom out, he said. “While we recognize that DELL’s business is highly cyclical, we believe DELL’s valuation is attractive at a P/E of 7X NTM and the long-term goal is to convert at least 100% FCF into net income to finance shareholder equity returns,” Ng said in a report. Note for Monday customers. Ng also said the company would benefit from the last replacement cycle of new computers purchased during the pandemic. Ng said the company has also driven revenue from its customer solutions and infrastructure teams to decrease as a percentage of youth between 2023 and 2024 amid the challenging landscape. In addition to the reduction in business spending, the company reported early signs of weakening storage demand, most notably among small and medium-sized businesses. But he said a return to growth and demand would improve investor sentiment and that Dell’s servers and storage would help the company maintain or increase the value of the stock. While he forecasts infrastructure solutions group revenue to fall 14% in fiscal 2024, it will grow 4% in fiscal 2025 and beyond. The customer solutions group’s revenue will also decline 14% in FY2024 before posting growth of 3% in FY2025 and 1% in FY2026. The long-term financial model also remains strong. with revenue growth of 3% to 4% and earnings per share growth of at least 6%, Ng said. On top of that, Dell will see at least 100% conversion of net income into free cash flow, with between 40% and 60% of free cash flow returned to shareholders. Ng also said the company’s price-to-earnings ratio of seven over the next 12 months makes the stock attractive. — Michael Bloom of CNBC contributed to this report.