HP Enterprise (HPE) PT Raised to $38 at BofA Securities

BofA Securities analyst Wamsi Mohan raised the price target on HP Enterprise (NYSE: HPE) to $38.00 (from $32.00) while maintaining a Buy rating.

The analyst comments "Our PO of $38 is based on 12x our C27E EPS of $3.06. Our target multiple is above the median (9x) of the historical range (6x-13.0x). In our opinion, this multiple is justified as it balances positives including that HPE now has a better growth profile, and free cash flow will likely grow significantly by 2026 vs. near-term macro headwinds. Downside risks to our PO are larger than expected economic slowdown due to inflation and rising interest rates, ongoing component availability concerns, more aggressive server pricing from peers, a faster than expected adoption of As-a-Service offerings which can pressure revenues in the near-term, unexpected share loss and slower than expected mix shift to higher margin products and services, FX headwinds, restructuring and execution challenges in relation to the JNPR acquisition. Upside risks are share gains, steady margin improvement and lower than expected restructuring costs and better free cash flow, accretion from the JNPR deal."

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