What Happened?
Shares of enterprise technology company Hewlett Packard Enterprise (NYSE: HPE) jumped 3.2% in the morning session after an analyst at JP Morgan reinstated coverage with an "Overweight" rating.
The investment bank set a new price target of $30.00 for the tech giant, suggesting a significant potential upside of 47.33% from its current price. Analyst Samik Chatterjee cited the recent acquisition of Juniper Networks as a key factor, stating it firmly establishes HPE as one of the largest networking companies with a broad portfolio. JP Morgan's analysis suggests that the increased mix of higher-margin networking revenues, along with cost synergies from the deal, could lead to substantial earnings growth for HPE by fiscal year 2027. The "Overweight" rating indicates that JP Morgan expects HPE's stock to outperform the average market return in the near future.
After the initial pop the shares cooled down to $20.81, up 2.3% from previous close.
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What Is The Market Telling Us
Hewlett Packard Enterprise’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 3.4% on the news that Barclays raised its price target on the stock to $26 from $24, maintaining an overweight rating. The analyst's increased optimism follows HPE's recent completion of its acquisition of Juniper Networks, a leader in AI-native networking. This strategic purchase is significant as it doubles the size of HPE's networking business and strengthens its portfolio to better compete in the high-growth artificial intelligence (AI) and hybrid cloud markets. Barclays noted that the acquisition should lead to better growth opportunities and improved gross margins for the enterprise technology giant. The firm anticipates the enhanced position in the networking industry could drive double-digit earnings per share for HPE by fiscal year 2027.
Hewlett Packard Enterprise is down 3.1% since the beginning of the year, and at $20.81 per share, it is trading 14.8% below its 52-week high of $24.42 from January 2025. Investors who bought $1,000 worth of Hewlett Packard Enterprise’s shares 5 years ago would now be looking at an investment worth $2,152.
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