Hewlett Packard Enterprise (HPE) falls 4% after cutting FY earnings outlook; Analysts cautious

October 19, 2023 5:22 PM EDT
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Price: $14.91 -0.67%

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(Updated - October 20, 2023 5:44 AM EDT) -- Hewlett Packard Enterprise fell in pre-open trading Friday after cutting its annual guidance as the company continues its investments in cloud and artificial intelligence.

Hewlett Packard Enterprise Co (NYSE: HPE) was down nearly 4% on the news.

For 2023, The company now sees EPS in a range of $1.35 to $1.39, down from a prior range of $1.42 to $1.46 a share. But forecasts on adjusted EPS was unchanged in a range of $2.11 and $2.15.

Looking further ahead, the company forecasts in 2024 of 2% to 4% and adjusted EPS of between $1.82 and $2.02 and aims to increased its dividend per share by 8%.

"While we credit HPE's impressive product portfolio and strong traction in GreenLake, we wait to update our model until after SeptQ reporters," Stifel analyst Matthew Sheerin said after the event.

Goldman Sachs analyst Michael Ng reiterated a Neutral rating.

"HPC & AI mid-term revenue growth of DD%, along with long-term 10% EBIT margins by F26 due to AI- which seems to be driven more by HPC than accelerated server sales- is more than offsetting our reduced estimates for Intelligent Edge, but visibility is more limited, in our view," the analyst wrote.

Additional reporting by Senad Karaahmetovic

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