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Headquartered in Houston, Texas, Hewlett Packard Enterprise Company (HPE) is a major global provider of enterprise IT solutions. With a market cap of $27.7 billion, HPE focuses on enabling digital transformation through a comprehensive portfolio of products and services, including cloud solutions, data storage, networking, and intelligent edge computing.
HPE has underperformed the broader market over the last year. The stock has gained 36.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.4%. However, in 2024, the stock is up 27.3%, compared to the SPX, which is up 25.2% on a YTD basis.
Zooming in further, HPE has outperformed the Technology Select Sector SPDR Fund (XLK). The exchange-traded fund has gained 23.4% on a YTD basis.
Hewlett Packard Enterprise has outperformed the broader market this year due to its strong focus on innovation and strategic partnerships. However, shares of Hewlett Packard Enterprise fell over 6% following its Q3 earnings report on Sep. 4. Its adjusted gross margin of 31.8% missed the consensus estimate of 33.4%.
Moreover, the company beat revenue forecasts, posting $7.71 billion compared to the expected $7.67 billion, while its EPS of $0.50 topped Wall Street's expectations of $0.46.
For the current fiscal year, ending in October 2024, analysts expect HPE’s EPS to grow 10.8% year over year to $1.84 on a diluted basis. The company's earnings surprise history is mixed. It beat the consensus estimate in two of the past four quarters while missing estimates on two other occasions.
Among the 16 analysts covering HPE stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and 10 “Holds.”
This configuration is more bullish than three months ago, with three suggesting a “Strong Buy.”
On Oct. 11, Amit Daryanani from Evercore ISI maintained a ‘Hold’ rating on Hewlett Packard Enterprise, with a price target of $22, implying a potential upside of 2.6% from current levels.
The mean price target of $21.53 represents a marginal premium to HPE’s current price levels. The Street-high price target of $26 suggests an upside potential of 21.3%.
On the date of publication, Rashmi Kumari 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.
