Hewlett Packard Enterprise Faces Mixed Expectations Ahead of Earnings Report
Analysts Predict Lower Profits as AI Strategy Gains Momentum
Hewlett Packard Enterprise Company (HPE), based in Houston, Texas, provides a wide array of information technology services in hybrid cloud, data management, and edge computing. The firm has a market cap of $25.6 billion and is scheduled to announce its Q4 earnings on Tuesday, Nov. 26.
As the report date approaches, analysts forecast that HPE will deliver a profit of $0.48 per share, down 2% from $0.49 in the same quarter last year. Notably, HPE has outperformed Wall Street’s earnings predictions in two of the last four quarters, though it fell short in the other two.
The company reported adjusted earnings of $0.45 per share last quarter, surpassing the consensus estimate by 15.4%. The growth in Q3 was driven by advancements in AI systems and the execution of its edge-to-cloud strategy, which significantly boosted both revenue and EPS.
For fiscal year 2024, analysts project HPE to achieve an EPS of $1.66, reflecting an increase of 7.8% from the previous year’s $1.54.
Year-to-date, HPE stock has risen 17%, a figure that lags behind the broader S&P 500 Index’s ($SPX) 22.3% gains and the iShares U.S. Technology ETF’s (IYW) 28.5% gain.
Following its Q3 earnings report on Sep. 4, shares of HPE dropped over 6%, primarily due to an adjusted gross margin of 31.8% that missed the consensus estimate of 33.4%. However, the company did exceed revenue forecasts by posting $7.71 billion against an expected $7.67 billion. For fiscal Q4, HPE anticipates revenue in the range of $8.1 billion to $8.4 billion.
A rebound occurred on Sep. 25 when HP Enterprise stock rose over 4% after Barclays upgraded it from “Equal-Weight” to “Overweight,” with a revised price target of $24.
The consensus view on HPE stock remains moderately positive, as indicated by an overall “Moderate Buy” rating. Out of 16 analysts covering the stock, five recommend a “Strong Buy,” one suggests a “Moderate Buy,” and ten advocate a “Hold.”
Currently, HPE has an average analyst price target of $21.53, indicating a potential upside of 8.4% from present levels.
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On the date of publication, Rashmi Kumari did not hold (either directly or indirectly) any positions in the securities mentioned in this article. All information and data provided are for informational purposes only, with further details available in the Barchart Disclosure Policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
