What Happened?
Shares of enterprise technology company Hewlett Packard Enterprise (NYSE: HPE) fell 5.2% in the pre-market session after Barclays downgraded the stock to Equal Weight from Overweight with a $77 price target, lowered from $83.
Barclays analyst Tim Long reduced the price target while leaving his underlying earnings projections unchanged, trimming the firm's target multiple to 13 times from 14 times fiscal 2028 estimated earnings per share of $5.92, according to StreetInsider and Investing.com. Long took a more cautious view across enterprise IT hardware, concurrently downgrading peers Dell Technologies and NetApp. Long observed in research cited by TipRanks that elevated commodity costs have supported server revenues through higher average selling prices, but a meaningful growth inflection driven by artificial intelligence has yet to appear. Although integrating Juniper Networks positioned networking to generate roughly half of operating profits, Barclays cautioned that upside will diminish as memory prices normalize, especially after a 186% year-to-date share run-up outpaced the S&P 500's 14% advance.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Hewlett Packard Enterprise? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Hewlett Packard Enterprise’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 4.9% on the news that Evercore ISI downgraded the stock to In-Line due to stretched valuation following a strong rally.
According to Tipranks, analyst Amit Daryanani cut the stock to In-Line from Outperform and kept a $65 price target. He said the shares were trading at 13 times fiscal 2027 earnings, against an eight-times average over five years, and that further multiple expansion had fewer near-term supports. More of the profit upside depends on networking supply. Networking accounts for more than half of segment operating profit, and orders there grew faster than revenue. He also said cloud and artificial-intelligence systems carry thinner margins than networking, and that the Helios opportunity looks more like a late fiscal 2027 and fiscal 2028 item. According to TipRanks, the cut landed alongside weakness in other artificial-intelligence infrastructure shares.
Hewlett Packard Enterprise is up 170% since the beginning of the year, but at $65.35 per share, it is still trading 11% below its 52-week high of $73.46 from October 2026. Investors who bought $1,000 worth of Hewlett Packard Enterprise’s shares 5 years ago would now be looking at an investment worth $4,342.
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