Hewlett Packard Enterprise (HPE): Raising PT on Increased Visibility Post Transactions - Oppenheimer

Oppenheimer analyst, Ittai Kidron, reiterated his Outperform rating on Hewlett Packard Enterprise (NYSE: HPE) following HPE's recent results, announcement of the spin-off of its Enterprise Services (ES) segment and its subsequent merger with CSC. The analyst took a closer look at the financial profile of HPE's remaining business and his in-depth analysis suggests that post the spin-off, HPE will 1) enjoy a net cash position of $7.2B, representing 26.0% of its current market cap excl. ES, 2) have ongoing annual FCF of ~$3B (excl. charges), 3) have an unchanged recurring profit profile, and 4) trade at 2.8x EV/EBITDA and 0.6x EV/sales based on current valuation and our FY17 estimates.

Based on his analysis, he believes the shares offer significant upside as the attractiveness of the remaining business becomes visible post spin-off. PT increases to $25.

For an analyst ratings summary and ratings history on HP Enterprise click here. For more ratings news on HP Enterprise click here.

Shares of HP Enterprise closed at $19.50 yesterday.

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