Hewlett Packard Enterprise (HPE): Unlocking Sum Of The Parts Isn't Enough- Sterne Agee CRT
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Rating Summary:
12 Buy, 22 Hold, 4 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 11 | Down: 13 | New: 19
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Sterne Agee CRT analyst, Rob Cihra, left his Neutral rating unchanged after HP Enterprise (NYSE: HPE) held an investor meeting as part of its Discover conference. The focus was its plan to spin/merge Enterprise Services (ES) with CSC, where the +45% jump in CSC’s stock leaves remainco HPE at a 9x P/E and 6x ex-projected net cash/ Financing debt. The analyst increased his PT +$1 to $19 but kept the Neutral rating as he questions how much P/E HPE (servers, storage, ex-China networking, software) really gets given declining revenue and margins in the face of public cloud deflation.
HPE targets GDP-like growth but ex-ES revenue has declined an avg -1%/yr and OpProfit -10%/yr each of the past 5yrs. Risks include cloud servers coming at low margin and w/ no real attach of Tech Support (TS) but the analyst believes TS is responsible for 48% of HPE’s entire profit.
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 $19.16 yesterday.
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