Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

Hewlett-Packard Enterprise raised to Buy at BofA on several catalysts; shares up

Source Investing

Investing.com -- Analysts at Bank of America (NYSE:BAC) (BofA) hiked their rating on Hewlett Packard Enterprise Co (NYSE:HPE) shares to Buy from Neutral and lifted the price target on the stock to $24 from $21.

The company’s shares rose roughly 4% in Tuesday’s market pre-open.

The upgrade reflects BofA's positive outlook on the company's potential for significant cost cuts, a cyclical recovery in its core markets, and revenue and cost synergies from its upcoming acquisition of Juniper Networks Inc (NYSE:JNPR)s.

HPE's acquisition of Juniper Networks for approximately $14 billion in cash is expected to close soon, with CEO Neri at the helm. The move is intended to reduce HPE's dependency on compute solutions and enhance its focus on the higher-margin networking business.

Despite a challenging networking market, BofA anticipates that cost synergies from the deal will exceed $450 million, with 70% expected to be realized by the end of 2026, contributing to a significant increase in consensus earnings per share (EPS).

“We expect additional cost takeouts at core HPE of at least 100bps incrementally, which is also likely conservative,” BofA analysts said in a Tuesday note.

In its Q3 financial report, HPE showcased AI server revenues of $1.3 billion and a substantial backlog of $3.4 billion. The company also reported an increase in server operating margins quarter over quarter, highlighting a focus on profitability.

BofA expects HPE to benefit from its partnership with NVIDIA (NASDAQ:NVDA), leveraging AI computing and capitalizing on Juniper’s Mist platform in the networking market.

“With decades of expertise in liquid cooling (CRAY systems) and increased adoption of supercomputing, HPE will be able to command a key position in AI adoption at Enterprise and Sovereign,” analysts continued.

HPE's stock is currently trading at approximately 8x the estimated 2025 consensus EPS, which is at the lower end of its historical range of 6 to 13x. While acknowledging the risks of execution challenges and increased leverage, particularly in a recession scenario, BofA's price objective of $24 is based on a 10 times multiple of the projected 2026 pro-forma EPS of $2.40.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changed Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Author Irene Q.

Sep 23, Wed

Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.

Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decision The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.

Author Mitrade

Sep 28, Mon

The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.

Nvidia's $150 billion buyback landed — and the AI sector fell anyway. That's the signal worth trading Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.

Author Irene Q.

Sep 29, Tue

Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.

【Daily Brief】30-year Treasury tops 5.59%, S&P 500 slips to 7,670 and gold holds $4,180 — PCE lands tonight The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.

Author Suzie

22 hours ago

The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.

Gold falls to near $4,150 as higher Treasury yields, oil prices outweigh softer PCE inflation Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday.

Author FXStreet

3 hours ago

Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday.

Popular Symbols