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Investing.com - Wells Fargo has raised its price target on HP Enterprise (NYSE:HPE) to $26.00 from $22.00 while maintaining an Equal Weight rating on the stock. The company, currently trading at $22.82, has shown strong momentum with a 23% return over the past six months. According to InvestingPro analysis, HPE appears fairly valued at current levels, with analyst targets ranging from $16 to $30.
The firm cited HPE’s "net positive results and guide" as the basis for the increased target, which represents a 9x P/E multiple on Wells Fargo’s CY26 estimates. Despite the price target increase, the analyst maintained caution regarding Juniper strategy execution and AI server profitability risks.
HPE reported approximately $1.6 billion in AI server revenue for F3Q25, up from $1.0 billion in the previous quarter, with new AI orders of approximately $2.2 billion and an AI backlog of $3.7 billion, representing a $500 million sequential increase. The company also saw Sovereign AI orders increase 250% quarter-over-quarter. With an overall "GOOD" Financial Health score from InvestingPro and revenue growth of 11.8% in the last twelve months, HPE demonstrates solid execution in the AI space.
Server margins stood at 6.4% for F3Q25, down 442 basis points year-over-year but up 50 basis points sequentially, with HPE reiterating its expectation to return to approximately 10% server EBIT margin in F4Q25 driven by continued pricing execution and increased mix of enterprise and Sovereign business.
For F4Q25, HPE guided revenue of $9.7-$10.1 billion and non-GAAP EPS of $0.56-$0.60 per share, with server revenue expected to decline mid-to-high single digits quarter-over-quarter due to a 30% sequential decline in AI systems revenue following a large deal shipment in F3Q25. The company maintains a healthy 2.28% dividend yield and has consistently paid dividends for 11 consecutive years. For deeper insights into HPE’s financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Hewlett Packard Enterprise (HPE) reported better-than-expected results for the third quarter of 2025. The company exceeded forecasts with non-GAAP earnings per share of $0.44, surpassing the anticipated $0.42, and achieved revenue of $9.1 billion, which was higher than the projected $8.35 billion. Raymond James responded by raising its price target for HPE to $30 from $29, maintaining a Strong Buy rating. Despite the strong quarterly results, HPE provided mixed guidance, noting a projected 30% quarter-over-quarter decline in AI platforms revenue due to typical business fluctuations. Morgan Stanley reiterated an Overweight rating with a $28 price target, describing HPE’s results as largely expected with modest revenue upside and some margin fluctuations. They noted that the guidance for October was in line with or slightly better than consensus estimates, factoring in a full quarter of Juniper Networks results. These developments reflect the company’s current financial performance and analyst perspectives.
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