This Analyst Believes Hewlett Packard Enterprise's Results Were 'Better Than Feared': What's Next?

Hewlett Packard Enterprise Co.’s HPE quarterly results were broadly in-line with expectations, while earnings and cash flow forecasts were slightly lower, according to Raymond James.

The Hewlett Packard Enterprise Analyst: Simon Leopold maintained an Outperform rating and a price target of $19.

The Hewlett Packard Enterprise Thesis: Although recent reports released by peers raised concerns around IT spending and a weakening macroenvironment, the company’s issues “stem from ongoing supply chain constraints, cost inflation and foreign exchange rates,” rather than from demand, Leopold said in a note.

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The company’s results were better than feared, with “F3Q22 sales of $6.95B, near our $6.96B estimate and the Street’s $6.93B,” the analyst mentioned. “Pro forma EPS of $0.48 met the Street’s $0.48,” he added.

“Management guided F4Q22 non-GAAP EPS of $0.52-0.60 vs. our prior consensus matching $0.59, and FY22 non-GAAP EPS of $1.96-2.04, down from its prior $1.96-2.10,” the analyst wrote. “HPE’s narrower focus within servers might make it a bit more nimble and less sensitive to the macro,” he further stated.

HPE Price Action: Shares of Hewlett Packard Enterprise had risen by 0.073% to $13.64 at the time of publication Wednesday.
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