Hewlett Packard Enterprise on Tuesday won an upgrade to buy from Bank of America on views that profit margins will improve and cost synergies from the acquisition of Juniper Networks. HPE stock climbed on the upgrade.
Bank of America analyst Wamsi Mohan upgraded the computer and networking company to buy from neutral. He raised his price target on HPE stock to 24.
"We view shares as attractive as we see the opportunity for significant cost cuts driven by new Chief financial Officer Marie Myers," Mohan said in a report. The BofA analyst also expects a "cyclical recovery across servers, storage and particularly networking as well as revenue and increased cost synergies with the upcoming Juniper acquisition."
On the stock market today, HPE stock rose more than 6% to 18.28.
HPE stock has gained 5% in 2024 with Tuesday's advance. The stock had pulled back in early September on an equity offering to fund the $14 billion Juniper acquisition.
"(Juniper) cost synergies will be higher than $450 million," Mohan said. "We expect a run rate of 70% of cost synergies to be achieved by end of 2026, which should drive meaningful upside to consensus EPS."
HPE stock trades near its 200-day moving average.
Also, HPE stock holds a Relative Strength Rating of only 23 out of a best-possible 99, according to IBD Stock Checkup.
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