UBS Lifts Hewlett Packard Enterprise Company (HPE)’s Price Target to $18, Maintains Neutral Rating

On Wednesday, UBS analysts lifted Hewlett Packard Enterprise Company (NYSE:HPE)’s price target to $18 from $16, while maintaining a Neutral rating for its shares.

UBS Lifts Hewlett Packard Enterprise Company (HPE)'s Price Target to $18, Maintains Neutral Rating

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The adjustment follows the company’s earnings call on June 3, in which it announced results that beat Wall Street’s revenue and profit estimates for the second quarter.

The better-than-anticipated results were driven by robust demand for Hewlett Packard Enterprise Company (NYSE:HPE)’s AI servers and hybrid cloud segment. They have also helped keep investor interest alive in the stock amid the DoJ’s review of the Juniper transaction.

However, the company’s growth ahead is expected to trail behind competitors, with a major concern being its AI system orders, which are substantially lower than rivals like Dell. Analysts highlighted that while orders tend to fluctuate quarterly, HPE’s trailing five-quarter orders are also substantially lower than competitors, raising questions about its competitive edge in the sector.

UBS noted that this gap could affect Hewlett Packard Enterprise Company (NYSE:HPE)’s valuation multiple. Given these factors, the firm has maintained its Neutral rating for the stock. However, the price target revision reflects positive momentum in the near term after recent quarter results.

Hewlett Packard Enterprise Company (NYSE:HPE) is a global edge-to-cloud company. Its offerings include cloud services, high-performance computing & artificial intelligence, compute, intelligent edge, software, and storage. The company’s shares gained 0.85% on Wednesday to close at $17.84.

While we acknowledge the potential of HPE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than HPE and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.