Hewlett Packard Enterprise (NYSE:HPE) Trading Down 5.1% on Analyst Downgrade

Key Points

• HPE shares fell 5.1% after UBS lowered its price target from $65 to $59 and maintained a neutral rating. Wells Fargo also cut its target, though the broader analyst consensus remains “Moderate Buy” with an average target of $69.44.
• HPE reported strong fiscal third-quarter results, with adjusted EPS of $1.11 and revenue of $12.21 billion, beating estimates. Management raised full-year 2026 guidance and cited continued demand for AI infrastructure and networking.
• Investors remain concerned that shortages of memory, CPUs and other components could delay deliveries and pressure margins, potentially limiting HPE’s ability to convert its large AI backlog into profits.

Hewlett Packard Enterprise Company (NYSE:HPE - Get Free Report) shares fell 5.1% during mid-day trading on Friday after UBS Group lowered their price target on the stock from $65.00 to $59.00. UBS Group currently has a neutral rating on the stock. Hewlett Packard Enterprise traded as low as $51.61 and last traded at $51.6840. 20,932,829 shares traded hands during trading, a decline of 1% from the average daily volume of 21,088,676 shares. The stock had previously closed at $54.44.

A number of other analysts have also issued reports on the company. Bank of America boosted their price objective on Hewlett Packard Enterprise from $80.00 to $82.00 and gave the company a "buy" rating in a research note on Monday. The Goldman Sachs Group lifted their price objective on shares of Hewlett Packard Enterprise from $32.00 to $79.00 and gave the stock a "buy" rating in a report on Wednesday, June 3rd. Citigroup increased their target price on Hewlett Packard Enterprise from $70.00 to $74.00 and gave the company a "buy" rating in a research note on Friday, July 24th. Deutsche Bank Aktiengesellschaft began coverage on Hewlett Packard Enterprise in a research report on Tuesday. They set a "buy" rating and a $62.00 price target on the stock. Finally, Wells Fargo & Company cut their price objective on Hewlett Packard Enterprise from $67.00 to $54.00 and set an "equal weight" rating for the company in a report on Thursday. Twelve equities research analysts have rated the stock with a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $69.44.

Insider Activity at Hewlett Packard Enterprise

In other news, SVP Kirt Karros sold 18,785 shares of Hewlett Packard Enterprise stock in a transaction that occurred on Monday, June 22nd. The shares were sold at an average price of $48.50, for a total transaction of $911,072.50. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.44% of the company's stock.

Trending Headlines about Hewlett Packard Enterprise

Here are the key news stories impacting Hewlett Packard Enterprise this week:

• Positive Sentiment: HPE reported fiscal Q3 adjusted earnings of $1.11 per share on $12.21 billion in revenue, exceeding estimates of $0.93 and $11.97 billion, respectively. Revenue rose 33.7% year over year, while earnings increased sharply from $0.44 per share in the prior-year quarter. HPE Reports Fiscal 2026 Third Quarter Results
• Positive Sentiment: Management raised fiscal 2026 guidance to $3.75-$3.85 in adjusted EPS and $46-$47 billion in revenue, above consensus. It also projected fourth-quarter EPS of $1.20-$1.30 and said fiscal 2027 revenue could grow 13%-17%, supported by AI and networking demand. HPE raises annual forecasts
• Positive Sentiment: AI infrastructure momentum remains strong. Networking revenue reportedly climbed 75% year over year, including a 270% increase in routing revenue, while HPE expanded its collaboration with Oracle to deploy Juniper Networking across Oracle’s AI data centers. HPE and Oracle Deepen Networking Collaboration
• Positive Sentiment: Analyst support remains generally favorable. Argus reaffirmed its buy rating with a $70 target, while Raymond James raised its target to $86 and Citi increased its target to $76.
• Neutral Sentiment: HPE is scheduled to hold a Networking Investor Day on September 30, which could provide additional details on strategy, portfolio growth and the Juniper integration. Unusually high call-option activity also suggests elevated bullish speculation, although it is not a fundamental indicator.
• Negative Sentiment: The immediate pressure comes from shortages of memory, CPUs and other components. Supply limitations could delay deliveries and constrain margins, raising concerns about how sustainably HPE can convert its substantial AI backlog into profit. UBS, Wells Fargo and Piper Sandler maintained neutral or equivalent ratings and reduced their price targets.

Institutional Investors Weigh In On Hewlett Packard Enterprise

Several institutional investors and hedge funds have recently made changes to their positions in HPE. California State Teachers Retirement System boosted its stake in Hewlett Packard Enterprise by 4,299.0% during the 2nd quarter. California State Teachers Retirement System now owns 92,484,612 shares of the technology company's stock valued at $4,171,981,000 after purchasing an additional 90,382,225 shares during the last quarter. Capital World Investors bought a new position in shares of Hewlett Packard Enterprise during the fourth quarter valued at $901,751,000. Barrow Hanley Mewhinney & Strauss LLC purchased a new stake in shares of Hewlett Packard Enterprise during the second quarter valued at $1,027,139,000. Primecap Management Co. CA bought a new stake in Hewlett Packard Enterprise in the 2nd quarter worth about $773,225,000. Finally, Legal & General Group Plc bought a new stake in Hewlett Packard Enterprise in the 2nd quarter worth about $512,721,000. Institutional investors own 80.78% of the company's stock.

Hewlett Packard Enterprise Trading Down 5.3%

The company has a debt-to-equity ratio of 0.72, a quick ratio of 0.75 and a current ratio of 1.09. The firm has a market cap of $68.25 billion, a PE ratio of 26.85, a price-to-earnings-growth ratio of 0.60 and a beta of 1.43. The stock has a 50-day simple moving average of $49.79 and a two-hundred day simple moving average of $37.68.

Hewlett Packard Enterprise (NYSE:HPE - Get Free Report) last announced its quarterly earnings results on Wednesday, September 2nd. The technology company reported $1.11 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.93 by $0.18. The firm 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 15.75%. The business's quarterly revenue was up 33.7% compared to the same quarter last year. During the same quarter last year, the firm posted $0.44 EPS. 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, sell-side analysts anticipate that Hewlett Packard Enterprise Company will post 2.92 EPS for the current year.

Hewlett Packard Enterprise Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Friday, October 16th. Investors of record on Thursday, September 17th will be paid a dividend of $0.1425 per share. This represents a $0.57 annualized dividend and a yield of 1.1%. The ex-dividend date of this dividend is Thursday, September 17th. Hewlett Packard Enterprise's dividend payout ratio (DPR) is 53.27%.

About Hewlett Packard Enterprise

Hewlett Packard Enterprise (HPE) is an enterprise technology company that designs, develops and sells IT infrastructure, software and services for business and government customers. Its core offerings span servers, storage, networking, and related software, together with consulting, integration and support services aimed at modernizing and managing enterprise IT environments. HPE's product portfolio includes systems for traditional data centers as well as solutions for high-performance computing, edge computing and telecommunications infrastructure.

A major focus for HPE is hybrid cloud and consumption-based IT.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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