Evercore ISI lifts HP Enterprise stock rating, raises target to $22

On Tuesday, Evercore ISI analyst Amit Daryanani upgraded HP (NYSE:HPQ) Enterprise (NYSE:HPE) stock rating from In Line to Outperform, simultaneously increasing the price target from $17.00 to $22.00. The upgrade comes as HPE trades at an attractive P/E ratio of 8.26 and P/B ratio of 0.91, with InvestingPro analysis indicating the stock is currently undervalued. Daryanani outlined an optimistic stance on the company, citing a balanced risk/reward profile that could be particularly appealing to long-term investors, with a downside projected at $15 and an upside potential over $30, compared to the stock’s current price around $17.

The analyst’s positive outlook is based on the assessment of four potential scenarios for HP Enterprise, each with varying impacts on the company’s future performance. Supporting this optimistic view, InvestingPro data shows HPE has achieved 11.2% revenue growth and maintained dividend payments for 11 consecutive years. The first scenario assumes the successful closure of the Juniper Networks (NYSE:JNPR) deal, anticipated to boost HPE’s earnings per share (EPS) through cost synergies, with an estimated stock value of up to $24. The second scenario, which does not involve Juniper Networks, envisions HPE improving its operating margins and achieving an EPS that could elevate the stock price to between $26 and $31.

In the third scenario, where HPE continues business as usual without the Juniper acquisition, Daryanani predicts the stock would remain stable with support levels at $15-$16. The final scenario explores a sum-of-the-parts approach, suggesting potential value from assigning higher multiples to HPE’s networking and storage segments, which could lead to a stock valuation in the $25-$30 range.

In his analysis, Daryanani emphasized that the likelihood of a positive outcome leading to a stock price between $25 and $30 is higher, while the downside risk remains contained around $15-$16. This favorable risk/reward configuration, combined with multiple paths to possible upside, was the key driver for the upgrade of HPE’s stock rating to Outperform and the elevation of the price target to $22.00. For deeper insights into HPE’s valuation and growth potential, investors can access comprehensive financial metrics and additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Hewlett Packard Enterprise (HPE) reported its Q1 2025 financial results, showing revenue of $7.85 billion, which exceeded expectations, although earnings per share (EPS) fell slightly short at $0.49. The company announced a dividend of $0.953125 per share for its preferred stockholders, payable on June 1, 2025. In collaboration with NVIDIA (NASDAQ:NVDA), HPE launched new AI enterprise solutions, including AI servers with NVIDIA Blackwell architecture, to enhance AI application performance and efficiency. Evercore ISI adjusted its price target for HPE shares from $22 to $17, maintaining an In Line rating, due to HPE’s mixed financial performance and guidance falling below expectations. The company is also proceeding with its planned acquisition of Juniper Networks, with a trial against the Department of Justice set for July. Additionally, HPE announced a workforce reduction of 2,500 positions as part of cost-saving measures. Meanwhile, Semrush Holdings appointed Caroline Tsay as an independent director to its Board, expanding the Board to nine directors. These developments highlight significant strategic and financial activities within these companies.

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