Hewlett Packard Enterprises – an unnoticed AI star?
Earnings from Hewlett Packard Enteprises this week could show that the company has the potential to benefit from the ongoing surge in demand for all things related to artificial intelligence.
For its upcoming fiscal second quarter (Q2) 2024 earnings release on June 4th, analysts expect Hewlett Packard Enterprises (HPE) to report revenue of $6.83 billion and earnings per share (EPS) of $0.39.
For the full fiscal 2024 year, HPE is guiding for flat revenue growth compared to 2023, along with adjusted EPS between $1.82 and $1.92. Wall Street analysts have a slightly more optimistic outlook, forecasting a modest 0.4% year-over-year (YoY) revenue increase to $29.2 billion and adjusted EPS of $1.88. While below last year's earnings of $2.15 per share, the stock may be undervalued at just 12.6 times projected free cash flow if HPE can grow its profits and cash flows going forward, especially given opportunities in the fast-growing AI server market.
Most Wall Street analysts remain on the sidelines regarding HPE stock. Out of 13 analysts covering the company, 11 currently rate the shares as a "hold", with just one "buy" and one "strong buy" recommendation.
Despite its underperformance relative to the broader market since being spun off from HP in 2015, HPE's stock price is only 9% off its all-time highs
HPE stock price – what do the brokers say?
LSEG Data & Analytics data shows a consensus analyst rating of ‘hold’ for HP – 1 strong buy, 3 buy and 12 hold - with the median of estimates suggesting a long-term price target of $17.78 for the share, around 1% higher than the current price (as of 3 June 2024).
HPE stock price – technical view
HP’s share price, which is up around 4% year-to-date, continues its advance towards its May peak at $18.95, made not far below its previous March 2018 all-time high at $19.48 and its March 2024 $20.07 record high.
HP Monthly Chart
On the daily chart the HP share price managed to find support along the 55-day simple moving average (SMA) at $17.47 last week and is expected to fill last week’s $17.97 to $18.29 price gap as long last week’s low at $17.31 underpins.
HP Daily Chart
Were last week’s $17.31 low to give way, though, the 200-day SMA at $16.68 and late-March to May lows at $16.50 to $16.26 would be back on the plate.
A rise above the April and May peaks at $18.76 to $$18.95 is needed, for the March record high at $20.07 to be back on the map.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
