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Texas-based Hewlett Packard Enterprise Company (HPE) is a global edge-to-cloud company that provides solutions allowing customers to capture, analyze, and act upon data seamlessly worldwide. With a market cap of $23.4 billion, Hewlett Packard Enterprise operates through Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, and Corporate Investments and Other segments.
The tech company has substantially underperformed over the past year. HPE stock has gained 4.6% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) 18.5% gains over the same time frame. In 2024, HPE stock is up 6.2% compared to $SPX’s 12.1% returns on a YTD basis.
Zooming in further, HPE has trailed the S&P 500 Technology Sector SPDR’s (XLK) 17.5% gains over the past 52 weeks and 6.4% returns in 2024.
Hewlett Packard Enterprise's underperformance relative to the broader market is primarily due to macroeconomic factors like inflation concerns, high interest rates, and economic uncertainty.
However, shares of Hewlett Packard Enterprise rose 10.7% in the subsequent trading session following its Q2 earnings release on June 4. The company surpassed its revenue and EPS guidance and reported a quarterly revenue growth of 3.3%.
For the current fiscal year, ending October, analysts expect Hewlett Packard Enterprise to report an EPS growth of 3.3% to $1.59 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 the projections on two other occasions. In the last reported quarter, HPE missed the Street’s EPS estimates by 4%.
Analysts’ consensus opinion on HPE stock is neutral, with a “Hold” rating overall. Out of 14 analysts covering the stock, two advise a “Strong Buy” rating, one has a “Moderate Buy” rating, and 11 recommend a “Hold.”
This configuration is slightly more bullish than two months before with only one analyst recommending a “Strong Buy.”
On June 21, Bank of America Securities’ (BAC) analyst Wamsi Mohan maintained a “Hold” rating and raised the price target from $22 to $24, which indicates a potential upside of 33.1% from current price levels.
The mean price target of $20.25 represents a premium of 12.3% to HPE’s current price levels.
On the date of publication, Aditya Sarawgi 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.
