Citi Upgrades HP Enterprise (HPE) to Buy
Citi analyst Asiya Merchant upgraded HP Enterprise (NYSE: HPE) from Neutral to Buy with a price target of $26.00 (from $23.00).
The analyst comments "We upgrade HPE to Buy from Neutral as we expect the company to benefit from improving demand in mainstream server and enterprise networking, expanding enterprise AI opportunities and a narrowing valuation gap versus peers (with networking contributing a larger portion of the operating income dollars post the closure of the Juniper acquisition in early 25). F4Q results exceeded expectations with F1Q guide largely in line. While AI orders/revenues can be lumpy, we see the potential for stronger contribution from enterprise AI and sovereigns which bodes positively for revenue momentum and margins ahead. Coupled with improving demand outlook in core enterprise infrastructure spending and potential EPS accretion from Juniper acquisition with management confident in closing the deal by early 2025, we are increasingly more constructive. Our Target Price increases to $26 (11x P/E multiple on CY26), still representing a 20% discount to peers."
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Shares of HP Enterprise closed at $21.65 yesterday.