UPDATE: Oppenheimer Starts HP Enterprise (HPE) at Outperform

(Updated - April 15, 2016 9:06 AM EDT)

Oppenheimer initiated coverage on HP Enterprise (NYSE: HPE) with an Outperform rating and a price target of $21. Analyst Ittai Kidron thinks HP Enterprise has a unique opportunity to emerge as a leading IT provider.

"Our bullish thesis is centered on its (1) ability to integrate go-tomarket and R&D efforts within Enterprise Group (EG) and leverage cross-divisional opportunities (Services and Software) to drive incremental growth, (2) renewed commitment to product innovation and a strong and refreshed product portfolio, (3) efforts to restructure, reduce cost, and improve margins mainly within Enterprise Services (ES), and (4) a high mix of recurring revenue (~42% of revenue) and strong FCF (PF $3.8B in FY16), which should become more transparent to investors once restructuring payments are paid out. No longer burdened by the PC/printer business and trading at only 7.5x PF CY16E FCF, we believe shares offer solid upside potential," said Kidron.

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 $17.50 yesterday.

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