HP Enterprise (HPE) PT Raised to $70 at Evercore ISI, 'has implied FY27 EPS getting to >$4.00'

Evercore ISI analyst Amit Daryanani raised the price target on HP Enterprise (NYSE: HPE) to $70.00 (from $40.00) while maintaining a Outperform rating.

The analyst comments "HPE reported an impressive set of F2Q (April) results and provided a much better-than-expected FY26 & FY27 guide. April-qtr print came in at $10.7B/0.79c vs. street at $9.8B/0.53. April-qtr sales were up 40% y/y driven by Networking segment up 148% (up double digits organically) and Cloud & AI segment up 23% and EBIT margins came in at 13.3%, up 530bps y/y. Notably, Cloud & AI strength of 23% was driven by x86 server revenues up 33% (pricing > Units from a contribution perspective) and traditional server orders were up >100% and AI systems backlog came in at $5.9B (including $1.8B of new AI systems orders). Notably, traditional server revenues grew >40% y/y, driven by higher AUPs while units were slightly down. In addition, Networking revenues were up double-digits, and notably HPE stressed that orders were up faster than sales. Impressively, HPE provided a much better-than-expected FY26 and FY27 guide that essentially has the company in FY27 achieving $4.5B of FCF and double-digit sales growth. Worth noting, their FY26 guide calls for EPS of ~$3.30 (vs. street at 2.42) and FCF is expected to be $3.5B in FY26 (vs. prior guide for $2.0B). While investors will debate the durability of revenue and FCF growth, HPE and peers believe that demand remains durable though FY26 and potentially beyond. Net/Net: Sticking with our OP rating and taking our price target up to $70 as HPE has implied FY27 EPS getting to >$4.00."

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