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

Key Points

• HPE shares fell 4.2% after Barclays downgraded the stock from overweight to equal weight and cut its price target from $83 to $77; shares opened at $64.84 versus a prior close of $68.81.
• Despite the downgrade, analyst sentiment remains generally positive, with a consensus “Moderate Buy” rating and an average price target of $65.44. Recent quarterly results also beat expectations, with earnings of $1.11 per share and revenue of $12.21 billion.
• Company insiders sold 551,456 shares worth approximately $35.3 million over the past three months, while institutional investors own 80.78% of HPE’s outstanding stock.

Hewlett Packard Enterprise Company (NYSE:HPE - Get Free Report) gapped down prior to trading on Wednesday after Barclays downgraded the stock from an overweight rating to an equal weight rating. The stock had previously closed at $68.81, but opened at $64.84. Barclays now has a $77.00 price target on the stock, down from their previous price target of $83.00. Hewlett Packard Enterprise shares last traded at $65.3680, with a volume of 3,928,610 shares traded.

Several other analysts also recently commented on the company. Argus reiterated a "buy" rating and set a $70.00 target price on shares of Hewlett Packard Enterprise in a research note on Friday, September 4th. Zacks Research upgraded Hewlett Packard Enterprise from a "hold" rating to a "strong-buy" rating in a research note on Friday, September 4th. Raymond James Financial upped their price target on Hewlett Packard Enterprise from $74.00 to $86.00 and gave the company an "outperform" rating in a report on Thursday, September 3rd. Citigroup upped their price target on Hewlett Packard Enterprise from $76.00 to $92.00 and gave the company a "buy" rating in a report on Thursday, October 1st. Finally, Weiss Ratings raised Hewlett Packard Enterprise from a "buy (b-)" rating to a "buy (b)" rating in a research report on Friday, September 4th. Two research analysts have rated the stock with a Strong Buy rating, ten have issued a Buy rating and eight have given a Hold rating to the company's stock. According to data from MarketBeat, Hewlett Packard Enterprise has a consensus rating of "Moderate Buy" and an average price target of $65.44.

Insider Activity

In related news, EVP Rami Rahim sold 34,456 shares of the stock in a transaction that occurred on Tuesday, September 29th. The shares were sold at an average price of $61.42, for a total transaction of $2,116,287.52. Following the transaction, the executive vice president owned 875,133 shares in the company, valued at $53,750,668.86. This represents a 3.79% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Gary M. Reiner sold 17,000 shares of the stock in a transaction that occurred on Monday, September 14th. The shares were sold at an average price of $56.91, for a total transaction of $967,470.00. Following the transaction, the director owned 65,072 shares in the company, valued at approximately $3,703,247.52. This trade represents a 20.71% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 551,456 shares of company stock valued at $35,271,258 over the last three months. Insiders own 0.44% of the company's stock.

Institutional Trading of Hewlett Packard Enterprise

Large investors have recently modified their holdings of the company. First Citizens Bank & Trust Co. lifted its holdings in Hewlett Packard Enterprise by 210.8% in the third quarter. First Citizens Bank & Trust Co. now owns 30,470 shares of the technology company's stock valued at $1,947,000 after acquiring an additional 20,666 shares during the period. Signal Advisors Wealth LLC boosted its position in Hewlett Packard Enterprise by 14.4% in the third quarter. Signal Advisors Wealth LLC now owns 77,912 shares of the technology company's stock worth $4,978,000 after purchasing an additional 9,793 shares during the last quarter. Foster Group Inc. grew its stake in shares of Hewlett Packard Enterprise by 2.8% during the 3rd quarter. Foster Group Inc. now owns 5,341 shares of the technology company's stock valued at $341,000 after purchasing an additional 146 shares during the period. Krilogy Financial LLC grew its stake in shares of Hewlett Packard Enterprise by 29.4% during the 3rd quarter. Krilogy Financial LLC now owns 23,021 shares of the technology company's stock valued at $1,619,000 after purchasing an additional 5,234 shares during the period. Finally, Affinity Capital Advisors LLC grew its stake in shares of Hewlett Packard Enterprise by 15.1% during the 3rd quarter. Affinity Capital Advisors LLC now owns 6,543 shares of the technology company's stock valued at $418,000 after purchasing an additional 856 shares during the period. Institutional investors own 80.78% of the company's stock.

Hewlett Packard Enterprise Stock Down 4.2%

The stock has a market cap of $87.52 billion, a PE ratio of 34.34, a price-to-earnings-growth ratio of 0.63 and a beta of 1.39. The company has a debt-to-equity ratio of 0.65, a quick ratio of 0.72 and a current ratio of 1.11. The company's 50-day moving average price is $58.98 and its 200 day moving average price is $45.75.

Hewlett Packard Enterprise (NYSE:HPE - Get Free Report) last posted its quarterly earnings data on Wednesday, September 2nd. The technology company reported $1.11 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.93 by $0.18. The company had revenue of $12.21 billion for the quarter, compared to the consensus estimate of $11.97 billion. Hewlett Packard Enterprise had a net margin of 6.60% and a return on equity of 15.50%. The firm's revenue was up 33.7% compared to the same quarter last year. During the same quarter last year, the firm posted $0.44 earnings per share. 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. As a group, analysts forecast that Hewlett Packard Enterprise Company will post 3.34 EPS for the current fiscal year.

Hewlett Packard Enterprise Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, October 16th. Shareholders of record on Thursday, September 17th will be given a $0.1425 dividend. The ex-dividend date is Thursday, September 17th. This represents a $0.57 annualized dividend and a yield of 0.9%. Hewlett Packard Enterprise's dividend payout ratio (DPR) is presently 29.69%.

Hewlett Packard Enterprise Company Profile

Hewlett Packard Enterprise Company NYSE: HPE is a global technology company that provides information technology products, services and solutions for businesses, governments and other organizations. Its offerings are designed to help customers build, manage and secure data center, cloud and edge-computing environments.

HPE's portfolio includes enterprise servers, high-performance computing systems, data storage, networking equipment, software and technology consulting services. The company also provides hybrid cloud and as-a-service solutions through HPE GreenLake, allowing customers to access and manage computing, storage, data protection and other IT capabilities through a flexible consumption model.

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