On Friday, Bernstein SocGen Group updated its outlook for HP (NYSE:HPQ) Enterprise (NYSE:HPE) shares, increasing the stock's price target to $21 from $19, while maintaining a Market Perform rating. The adjustment follows HP Enterprise's release of its fourth quarter results, which slightly exceeded market expectations.
The stock, currently trading near its 52-week high with a robust 30% year-to-date return, has shown strong momentum. According to InvestingPro data, analyst price targets for HPE range from $18 to $29, with a consensus recommendation leaning towards Moderate Buy.
HP Enterprise shared that it anticipates completing the acquisition of Juniper early in 2025, a factor contributing to the company's decision not to provide full-year guidance. However, HP Enterprise expressed a confident outlook for IT spending in the calendar year 2025.
The guidance for the first quarter of fiscal year 2025 was reported to closely align with consensus estimates. With a market capitalization of $28.1 billion and a P/E ratio of 15.4, InvestingPro analysis indicates the stock is currently trading near its Fair Value. InvestingPro subscribers have access to 8 additional key insights about HPE's valuation and growth prospects.
The firm has made minor adjustments to its first quarter and full fiscal year 2025 estimates for HP Enterprise. The company's AI server revenues for the quarter met expectations at $1.5 billion.
Despite this, HP Enterprise forecasted a dip in AI revenues for the first quarter of the upcoming fiscal year, attributing this in part to the Blackwell ramp, a trend that appears to be consistent with other vendors in the sector.
Moreover, HP Enterprise revealed that it had removed $700 million worth of server orders from its books during the quarter. This move was justified by concerns regarding the creditworthiness of the customer in question. The analyst concluded by reiterating the Market Perform rating for HP Enterprise and raising the price target to $21, basing this decision on the updated estimates for fiscal year 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.