HP Enterprise (HPE) PT Raised to $20 at Susquehanna
Susquehanna analyst Mehdi Hosseini raised the price target on HP Enterprise (NYSE: HPE) to $20.00 (from $14.00) while maintaining a Neutral rating.
The analyst commented: "HPE reported mixed Apr-Q (2QFY24) results as reported revenues exceeded expectations, but margins were below. Overall IT spending showing some green shoots in traditional servers, and backlog is now at normal level. Midpoint of the Jul-Q guide was above SFG/Consensus. HPE's order book continues to be robust, particularly by AI (Cray) though AI Servers face margin pressure. All in all, we continue to believe HPE lacks key growth oriented products in its product portfolio, and as such key competitors like NTAP and Dell will continue to gain share and consolidate AI supply chain. We are also introducing FY26 estimates, and increasing PT reflecting ~1.10-1.15x EV/Sales. In fact, as the OEM/ODM biz model faces increased margin pressure due to increased competition and higher AI related BOM cost, we find the EV/Sales as the most appropriate."