Hewlett Packard Enterprise (HPE): Raising PT Despite Weak Quarter - Jefferies
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Jefferies analyst, James Kisner, reiterated his Buy rating on shares of HP Enterprise (NYSE: HPE) after the company reported a messy Q3 with light revenue and a low-quality EPS beat. Q4 EPS guidance was in-line. As anticipated in press reports, HPE announced it intends to spin out most of the Software business to a new entity combined with UK-based Micro Focus.
The revenue shortfall was chiefly driven by Enterprise Group ($6.48B, Street = $6.85B), Software ($731M, Street = $811M), and Enterprise Services ($4.73B, Street = $4.80B). Within Enterprise Group, Networking (+12% Y/Y organically, c.c.) remained strong while Storage was notably weak (-5% c.c.). Servers declined (-2% c.c.). but EBIT ended up OK at $1.08B (Street = $1.06B) on better than expected gross margins (29.3%, Street = 28.8%) and lower than-expected opex ($2.49B, Street = $2.60B).
The analyst stated "We continue to believe HPE shares offer a compelling valuation and will continue to rise as investors become more comfortable with HPE's revenue and free cash flow outlook". The price target increases to $27.00 (from $24.25.
Shares of HP Enterprise closed at $22.09 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Jefferies Cuts Price Target on Waters Corp. (WAT) Following Revenue Miss
- Stifel Remains Sidelined on Crane Co. (CR) Following Earnings Call
- AK Steel (AKS) PT, Estimates Raised at Jefferies
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change
Related EntitiesJefferies & Co
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!