Hewlett Packard Enterprise (HPE): Raising PT Despite Weak Quarter - Jefferies
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) to Acquire B/E Aerospace (BEAV) for $6.4B
- China Oceanwide to Acquire Genworth Financial (GNW) for $2.7B
- Top 10 News for 10/17 - 10/21: Merger Rumors Abound; CEOs Depart; Tesla Kicks Autopilot Up A Notch
- Wall Street ends little changed; Microsoft hits record
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. 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 Reliance Steel (RS) Following 3Q EPS Miss and Guidance
- Maxim Integrated (MXIM) PT Bumped to $45 at Jefferies Following In-Line Results on Note 7 Impact
- Jefferies Cuts Price Target on Crown Holdings (CCK) Following 3Q
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!