HP Enterprise (HPE) PT Raised to $40 at Evercore ISI
Evercore ISI analyst Amit Daryanani raised the price target on HP Enterprise (NYSE: HPE) to $40.00 (from $30.00) while maintaining a Outperform rating.
The analyst commented: 'In a filing released this morning, HPE announced that it closed the partial sale of its H3C stake to several China-based buyers for total proceeds of $986.8M. HPE previously held a 19% ownership interest in H3C. Following this transaction yesterday, the company has sold ~13.8% of that stake, with the remaining ~5.2% expected to be sold to Unisplendour (UNIS) in H1:26. Recall, HPE first announced the sale process in November and December 2025. The November announcement had originally intended the sale of a 10% stake to five China-domiciled buyers (including UNIS) for ~$714M, with the remaining 9% being sold in a seperate transaction only to UNIS. With the addition of three new buyers since the initial announcement, the transaction closed yesterday at a larger ~13.8% stake, leaving UNIS to acquire the remaining ~5.2%, which’ll add to its existing ~81% stake of H3C. Importantly, the total expected proceeds across the two transactions remain broadly unchanged at ~$1.4B. The proceeds also provide incremental balance sheet flexibility as HPE continues to delever following the Juniper acquisition, with net leverage exiting the Jan-qtr at 2.6x (down from 3.1x post Juniper close). HPE is targeting a net leverage ratio of ~2.0x by the end of FY27. Net/Net: HPE’s partial H3C stake sale remains broadly in line with the company’s previously announced monetization plan, with only modest changes to the buyer mix and transaction sequencing. The sale provides incremental balance sheet flexibility as HPE continues to delever following the Juniper acquisition, while the remaining H3C stake is still expected to be sold to UNIS in H1:26. Maintain OP but raising our target to $40 (15x our FY27 EPS estimate)."