Bank of America Securities analyst Wamsi Mohan maintained a Buy rating on Hewlett Packard Enterprise (HPE – Research Report) today and set a price target of $20.00.
Wamsi Mohan has given his Buy rating due to a combination of factors that highlight Hewlett Packard Enterprise’s potential for value creation. The involvement of activist investor Elliott Management, which has taken a significant stake in HPE, suggests a belief in the company’s undervaluation compared to peers like Dell. Additionally, the valuation on a sum-of-the-parts basis is particularly attractive, with Aruba alone representing a substantial portion of the enterprise value.
Furthermore, there are opportunities for operational improvements, especially following the last quarter’s performance issues. The potential synergies from a possible deal with Juniper Networks (JNPR) could also enhance value. If the JNPR deal does not proceed, HPE has the option to execute a significant share buyback, which could materially increase earnings per share. These factors, combined with the potential for structural cash flow improvements, underpin Mohan’s Buy rating for HPE.