The consensus analyst price target for Hewlett Packard Enterprise has increased by $0.25 to $26.51. Analysts cite improving profit margins, ongoing revenue growth, and momentum in key business segments as reasons for the revised outlook.

Analyst Commentary

Recent analyst updates reflect a mixed but generally constructive outlook for Hewlett Packard Enterprise, with several firms increasing their price targets and highlighting key drivers for future performance.

• Bullish analysts highlight ongoing momentum in the company’s networking and data center segments, particularly following the acquisition of Juniper.
• Several upward price target revisions are attributed to strong profit margin improvements and a healthy trajectory of revenue growth.
• Expectations are rising for HPE’s guidance at upcoming investor meetings, with projections for mid- to high-single digit revenue growth and higher EPS in fiscal 2026.
• Some see upside for HPE’s diversified business mix, with robust execution in core segments and opportunities in AI platforms supporting long-term valuation multiples.

• Bearish analysts maintain a cautious stance due to mixed guidance, with concerns over a projected sharp quarter-over-quarter decline in AI platforms revenue.
• There is continued scrutiny over core margin softness, despite expectations for incremental improvement in future quarters.
• Some remain Neutral on the stock, citing the need for more sustained improvements in profitability and persistent competition within enterprise IT spending.

What's in the News

• The U.S. has formed a $1 billion partnership with Advanced Micro Devices (AMD), Hewlett Packard Enterprise (HPE), Oracle, and Oak Ridge National Laboratory to build two new supercomputers. The first, Lux, is set to go online within six months (Reuters).
• The U.S. intelligence community intervened to support the HPE-Juniper merger, arguing it was vital for national security and essential for U.S. competition with Huawei (Axios).
• HPE and Ericsson have established a joint validation lab in Sweden to enable real-world testing of cloud-native 5G core solutions. This aims to streamline deployment and management of advanced network functions for telco providers.
• HPE announced a 10% increase to its annual dividend for fiscal year 2026, signaling confidence in its financial outlook.
• An increase to HPE’s equity buyback authorization was announced, bringing total repurchase authorization to approximately $3.7 billion.

Valuation Changes

• The Fair Value Estimate has risen slightly, increasing from $26.26 to $26.51 per share.
• The Discount Rate has increased marginally from 9.95% to 10.03%.
• The Revenue Growth projection has edged higher, moving from 10.30% to 10.41%.
• The Net Profit Margin estimate has improved from 5.95% to 6.52%.
• The forecast for the Future P/E Ratio has declined from 17.60x to 16.20x.