Hewlett Packard Enterprise (NYSE:HPE) Shares Gap Down on Analyst Downgrade

Key Points

• HPE shares fell sharply after Evercore downgraded the stock from “outperform” to “in-line,” sending shares from a prior close of $62.09 to an opening price of $55.61. Evercore set a $65 price target.
• Despite the downgrade, analyst sentiment remains favorable overall, with a “Moderate Buy” consensus rating and an average price target of $69.18. Barclays, JPMorgan, Zacks Research and Deutsche Bank have issued bullish ratings or raised targets.
• HPE reported quarterly earnings of $1.11 per share, exceeding estimates of $0.93, while revenue rose 33.7% year over year to $12.21 billion. The company also declared a quarterly dividend of $0.1425 per share, equivalent to a 1.0% annualized yield.

Hewlett Packard Enterprise Company (NYSE:HPE - Get Free Report)'s stock price gapped down before the market opened on Monday after Evercore downgraded the stock from an outperform rating to an in-line rating. The stock had previously closed at $62.09, but opened at $55.61. Evercore now has a $65.00 price target on the stock. Hewlett Packard Enterprise shares last traded at $56.3160, with a volume of 6,548,623 shares changing hands.

A number of other brokerages have also commented on HPE. Barclays raised their price objective on Hewlett Packard Enterprise from $67.00 to $79.00 and gave the stock an "overweight" rating in a research report on Thursday, September 3rd. JPMorgan Chase & Co. increased their price target on shares of Hewlett Packard Enterprise from $37.00 to $68.00 and gave the stock an "overweight" rating in a research report on Tuesday, June 2nd. Susquehanna boosted their price objective on shares of Hewlett Packard Enterprise from $21.00 to $65.00 and gave the company a "neutral" rating in a research report on Tuesday, June 2nd. Zacks Research upgraded shares of Hewlett Packard Enterprise from a "hold" rating to a "strong-buy" rating in a research note on Friday, September 4th. Finally, Deutsche Bank Aktiengesellschaft assumed coverage on shares of Hewlett Packard Enterprise in a research report on Tuesday, September 1st. They issued a "buy" rating and a $62.00 target price for the company. One investment analyst has rated the stock with a Strong Buy rating, twelve have issued a Buy rating and six have given a Hold rating to the company's stock. Based on data from MarketBeat, Hewlett Packard Enterprise has an average rating of "Moderate Buy" and a consensus target price of $69.18.

Insider Activity at Hewlett Packard Enterprise

In related news, SVP Kirt Karros sold 18,785 shares of the stock in a transaction that occurred on Monday, June 22nd. The stock was sold at an average price of $48.50, for a total value of $911,072.50. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 0.44% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the business. Empowered Funds LLC raised its holdings in Hewlett Packard Enterprise by 317.3% during the first quarter. Empowered Funds LLC now owns 149,810 shares of the technology company's stock valued at $2,312,000 after buying an additional 113,906 shares in the last quarter. Geneos Wealth Management Inc. increased its holdings in shares of Hewlett Packard Enterprise by 44.7% during the 1st quarter. Geneos Wealth Management Inc. now owns 4,456 shares of the technology company's stock valued at $69,000 after acquiring an additional 1,377 shares during the last quarter. Brown Advisory Inc. raised its stake in shares of Hewlett Packard Enterprise by 4.4% in the 2nd quarter. Brown Advisory Inc. now owns 23,593 shares of the technology company's stock valued at $482,000 after acquiring an additional 996 shares in the last quarter. Jump Financial LLC raised its stake in shares of Hewlett Packard Enterprise by 25.8% in the 2nd quarter. Jump Financial LLC now owns 15,662 shares of the technology company's stock valued at $320,000 after acquiring an additional 3,215 shares in the last quarter. Finally, WINTON GROUP Ltd acquired a new stake in Hewlett Packard Enterprise in the 2nd quarter worth approximately $207,000. Institutional investors own 80.78% of the company's stock.

Hewlett Packard Enterprise Stock Down 9.6%

The stock has a market cap of $74.52 billion, a P/E ratio of 29.36, a PEG ratio of 0.55 and a beta of 1.43. The company has a quick ratio of 0.72, a current ratio of 1.11 and a debt-to-equity ratio of 0.65. The business has a 50-day simple moving average of $51.32 and a 200-day simple moving average of $39.14.

Hewlett Packard Enterprise (NYSE:HPE - Get Free Report) last released its quarterly earnings results on Wednesday, September 2nd. The technology company reported $1.11 EPS for the quarter, beating analysts' consensus estimates of $0.93 by $0.18. Hewlett Packard Enterprise had a net margin of 6.60% and a return on equity of 15.50%. The company had revenue of $12.21 billion for the quarter, compared to analyst estimates of $11.97 billion. During the same quarter last year, the firm posted $0.44 earnings per share. The company's quarterly revenue was up 33.7% compared to the same quarter last year. Hewlett Packard Enterprise has set its Q4 2026 guidance at 1.200-1.300 EPS and its FY 2026 guidance at 3.750-3.850 EPS. Analysts expect that Hewlett Packard Enterprise Company will post 3.34 EPS for the current year.

Hewlett Packard Enterprise Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Friday, October 16th. Shareholders of record on Thursday, September 17th will be given a dividend of $0.1425 per share. The ex-dividend date of this dividend is Thursday, September 17th. This represents a $0.57 dividend on an annualized basis and a yield of 1.0%. Hewlett Packard Enterprise's payout ratio is currently 29.69%.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise Company NYSE: HPE is a global technology company that provides information technology products, services and solutions for businesses and other organizations. Its offerings are designed to support data centers, cloud computing, artificial intelligence, networking and the management of distributed IT environments.

HPE's portfolio includes enterprise servers, data storage systems, networking equipment, high-performance computing and software. Through its HPE GreenLake platform, the company also delivers cloud and as-a-service solutions that allow customers to access computing, storage, data protection and other IT capabilities through a flexible consumption model.

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