Hewlett Packard Enterprise (HPE): Spinoffs Remain On Track, Shares Undervalued - Oppenheimer
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Oppenheimer analyst, Ittai Kidron, reiterated his Outperform rating on shares of HP Enterprise (NYSE: HPE) after yesterday's investor event in San Francisco. The increased clarity on the financial profile of residual HPE increases his conviction in the investment validity of the company.
1) the Enterprise Services (ES) and Software spin-offs are on track to close in 2017 and are expected to unlock significant value
2) Enterprise Group (EG) offers both growth and margin expansion opportunities
3) the FCF characteristics of remain-co are expected to be attractive and suggest residual HPE valuation is depressed
4) the financial outlook for remainder of the year is unchanged
No change to the price target of $25.
Shares of HP Enterprise closed at $21.47 yesterday.
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