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Hewlett Packard Enterprise Co (NYSE: HPE) reported two upbeat quarters in the second half of fiscal 2020 and is poised to benefit as enterprise IT spending recovers in 2021, according to JPMorgan.
The Hewlett Packard Enterprise Analyst: Paul Coster upgraded Hewlett Packard Enterprise from Neutral to Overweight, while raising the price target from $13 to $16.
The Hewlett Packard Enterprise Thesis: The company has executed cost-saving initiatives, made a “well-timed acquisition in the SD-WAN space,” and is leveraging the high performance computing (HPC) opportunity, Coster said in the note.
“HPE’s execution surprised positively in the two recent quarters, with the firm making good progress on the $800 million cost-saving initiative, stabilizing results in servers and storage, posting strong results in all the growth segments (HPC, Intelligent Edge, as-a-service),” the analyst wrote.
“HPE seems poised to capture a meaningful share of the $3 billion of Exascale HPC projects in pipeline,” Coster said. “The stock looks attractively valued, neglected by the sell-side, and it feels like a good contrarian long trade that might capture a value-rotation tailwind, buoyed along by improving FCF."
HPE Price Action: Shares of Hewlett Packard Enterprise closed Friday at $12.54.
Photo: Courtesy Hewlett Packard Enterprise
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