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Hewlett Packard Enterprise Company (HPE), with a market cap of $22.6 billion, leads in edge-to-cloud solutions, including cloud services, compute, HPC & artificial intelligence (AI), intelligent edge, software, and storage. Based in Spring, Texas, it enables global customers to efficiently capture, analyze, and leverage data across various sectors.
Shares of Hewlett Packard have slightly underperformed the broader market over the past 52 weeks. HPE has gained 25% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.6%. In 2024, shares of HPE are up 1.8%, compared to SPX's 9.5% gains on a YTD basis.
Zooming in further, HPE also lagged behind the S&P 500 Technology Sector SPDR's (XLK) 36.2% gains over the past 52 weeks. Moreover, the exchange-traded fund's 6.8% returns on a YTD basis dwarf HPE’s low single-digit gains over the same time frame.
HPE’s weak price action relative to the broader indexes over the past year can be attributed to the intense competition from firms, particularly in enterprise software solutions. Moreover, following mixed fiscal Q1 earnings results and a subdued second-quarter outlook, HPE's shares dropped on Feb. 29. The decline in revenue was driven by reduced network demands, deferred GPU orders, and insufficient GPU supply.
However, in a recent trading session, Hewlett-Packard stock surged 1.9% on May 13 after unveiling Aurora, the world's second exascale supercomputer, in collaboration with Intel Corporation (INTC) for the U.S. Department of Energy’s Argonne National Laboratory.
For the current fiscal year, ending in October, analysts expect HPE’s EPS to decline by 9.1% to $1.40 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
Among the 13 analysts covering the stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy,” one “Moderate Buy,” and 11 “Holds.”
This configuration has been consistent over the past months. However, it is slightly less bullish than three months before, with two “Strong Buy” ratings.
On April 17, Wells Fargo & Company (WFC) analyst Aaron Rakers maintained an "Equal-Weight" rating on Hewlett Packard, citing expectations of strong acceleration in APU server conversion with normalizing GPU lead times. He raised the price target to $19 – the Street-high price target – which implies a potential upside of 9.3% from the current price levels.
The stock currently trades slightly above the mean price target of $17.33.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
