In a report released today, Wamsi Mohan from Bank of America Securities reiterated a Buy rating on Hewlett Packard Enterprise (HPE – Research Report), with a price target of $20.00.
Wamsi Mohan’s rating is based on a combination of factors that highlight both challenges and opportunities for Hewlett Packard Enterprise. Despite facing competitive pressures and tariff impacts that have led to disappointing margin and EPS guidance for fiscal year 2025, the company has announced a significant cost-saving initiative. This initiative, along with potential savings from the JNPR acquisition, could result in nearly $800 million in total savings, translating to an approximate $0.60 increase in EPS, which is considered highly significant.
Furthermore, Mohan views the current valuation of HPE shares as attractive, trading at 7 times the estimated EPS for 2026, which he considers too low to adopt a negative outlook. The long-term potential from AI servers also contributes to the Buy rating, despite the short-term operational margin compression and revenue adjustments. The price objective has been adjusted from $26 to $20, reflecting these considerations and the ongoing uncertainty surrounding the JNPR deal.
Mohan covers the Technology sector, focusing on stocks such as Apple, International Business Machines, and Western Digital. According to TipRanks, Mohan has an average return of 9.9% and a 56.69% success rate on recommended stocks.
In another report released on March 4, Barclays also maintained a Buy rating on the stock with a $27.00 price target.