In a report released yesterday, Meta Marshall from Morgan Stanley maintained a Hold rating on Hewlett Packard Enterprise (HPE – Research Report), with a price target of $14.00.
Meta Marshall has given his Hold rating due to a combination of factors affecting Hewlett Packard Enterprise. One significant reason is the company’s longstanding challenges, such as efficiency and capital allocation, which have historically kept its stock trading at a discount compared to peers. Although HPE has initiated steps to improve efficiency, including a $350 million reduction in force and the anticipated synergies from the Juniper acquisition, these efforts are still in progress and constrained by the pending acquisition.
Additionally, the potential involvement of activist investor Elliott Management, which has reportedly taken a significant stake in HPE, introduces both opportunities and uncertainties. While Elliott’s involvement might drive further improvements, the current limitations on shareholder-friendly actions, such as share repurchases, due to the ongoing acquisition process, suggest that any significant valuation adjustments may not occur in the short term. Therefore, despite the potential for improvement, the current environment and pending strategic moves justify a Hold rating.
Marshall covers the Technology sector, focusing on stocks such as Arista Networks, Cisco Systems, and Coherent Corp. According to TipRanks, Marshall has an average return of 4.8% and a 52.73% success rate on recommended stocks.
In another report released on April 11, Evercore ISI also maintained a Hold rating on the stock with a $17.00 price target.